Mortgage application volume fell 11.6 percent on an adjusted basis during the week ended December 28, according to the latest weekly survey released by the Mortgage Bankers Association.
The MBA’s index fell to 533.9 from 603.8 the previous week, far below its peak of 1,856.7 achieved during the week ended May 30, 2003.
The refinance share of total applications dropped to 50.9 percent from 53.0 percent a week earlier, while the share of adjustable-rate mortgages fell to 9.8 percent from 10.4 percent.
The average 30-year fixed-rate mortgage decreased to 6.05 percent from 6.10 percent, while the 15-year fixed fell to 5.61 percent from 5.66 percent.
The average rate on a one-year ARM dipped to 6.00 percent from 6.03 percent the week prior.
Freddie Mac also released its weekly interest rate survey Thursday, with the average 30-year fixed dropping to its lowest level in four weeks.
The 30-year fixed-rate mortgage averaged 6.07 percent this week, down from last week’s 6.17 percent, while the 15-year fell to 5.68 percent from 5.79 percent.
A year ago, the 30-year averaged 6.18 percent and the 15-year averaged 5.94 percent.
Adjustable-rate mortgages also saw improvement, with the 5-year ARM averaging 5.78 percent this week compared to last week’s 5.90 percent, while the one-year ARM dipped to 5.47 percent from 5.53 percent.
A year ago, the 5-year averaged 6.02 percent and the one-year averaged 5.42 percent.
Freddie Mac chief economist Frank Nothaft said in a news release that rates fell amid mixed signals regarding the direction of the economy.
“On the downside, the Institute for Supply Management’s index of manufacturing activity showed significant contraction in this sector, perhaps a harbinger of a more substantial economic slowdown to begin this year,” Nothaft said.
“On the upside, the Conference Board reported that consumer confidence rose in December for the first time in five months, with more positive expectations for the next six months.”
In regard to housing, Nothaft said, “Our latest forecast has total home sales continuing to decline in the first quarter of the year before starting a slow recovery; still, sales of new and existing houses are projected to be 5.09 million in 2008, a decline of more than 11% from the previous year.”
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