The Times Square ball wasn’t the only thing that dropped into the new year–mortgage application activity was down from two weeks earlier, according to Mortgage Bankers Association (MBA) data for the week ending Jan. 3. The data includes adjustments for the year-end holidays.
The Market Composite Index dropped by 1.5 percent on a seasonally-adjusted basis from two weeks earlier
, while the unadjusted index plummeted by 22 percent. The seasonally-adjusted Purchase Index rose by five percent from two weeks ago
, but the unadjusted Purchase Index fell by 14 percent compared with two weeks ago
and was two percent higher than the same week one year ago. The Refinance Index decreased eight percent from two weeks ago
and was 74 percent higher than the same week one year ago, and refinance share of mortgage activity increased to 58.9 percent of total applications from 54.8 percent the previous week.
Among the federal programs, the FHA share of total applications increased to 12.2 percent from 12.1 percent the week prior and the VA share of total applications increased to 14.1 percent from 13.9 percent while the USDA share of total applications decreased to 0.5 percent from 0.6 percent.
Mike Fratantoni, MBA senior vice president and chief economist, noted, “The end of the year is the slowest time for home sales, so it is not at all surprising that activity was light. However, after a seasonal adjustment, purchase application volume was up relative to the pre-holiday period and started off 2020 ahead of last year’s pace. We expect that the strong job market will continue to support purchase activity this year, and the uptick in housing construction towards the end of last year should provide more inventory for prospective buyers.”