Mortgage demand fell for the second week despite another drop in rates, according to the weekly survey from the Mortgage Bankers Association.
- Purchase demand was down 3.0% for the week and is now down 40% when compared to last year.
- Refi demand was actually up 5.0% for the week but is still down 80% when compared to last year.
Breaking It Down. Refis were up two percentage points to 28.7%of total applications while the adjustable-rate mortgage share of activity fell to 7.6% of total applications.
Mortgage Rates. Rates fell for the fourth straight week with the 30-year fixed at 6.41% for the week ending December 2nd, this is down 8 basis points from last week and is now down 75 basis points from the high at the end of October. Despite the drop, rates are still 310 basis points higher than one year ago.
- The 15-year fixed fell 18 bips to 5.84% and the 5/1 ARM increased 11 basis points to 5.59%
Analysis. Joel Kan, economist at MBA, highlighted the affordability issue and the impact it is having on loan size. “The average loan size for purchase applications decreased to $387,300 – its lowest level since January 2021. The decrease was consistent with slightly stronger government applications and a rapidly cooling home-price environment.”