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According to the survey, The Refinance Index increased 1% from the previous week, pushing refinances 105% higher year-over-year. The seasonally adjusted Purchase Index increased by 2% from the week earlier. On an unadjusted basis, the Purchase Index decreased 2%, however, it is currently 26% higher year-over-year.
"U.S. Treasury rates stayed low last week, in part due to uncertainty over the prospects of additional pandemic-related government stimulus, as well as concerns about the continued rise in COVID-19 cases across the country. Mortgage rates, as a result, fell to another survey low, with the 30-year fixed mortgage rate dropping five basis points to 2.85 percent," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "Homeowners once again acted on the decline in rates, with refinance activity rising for the second straight week and up 105 percent from a year ago."
"The ongoing strength in the housing market has carried into December. Applications to buy a home increased for the fourth time in five weeks, as both conventional and government segments of the market saw gains. Government purchase applications rose for the sixth straight week to the highest level since June - perhaps a sign that more first-time buyers are entering the market," added Kan.
The MBA survey revealed that the refinance share of mortgage activity was up to 72.7% from 72% the previous week, the adjustable-rate mortgage share of activity increased to 1.8% of total applications, the FHA share increased to 11% up from 9.9%, the VA share decreased from 12.7% to 12.1% and the USDA share remained stagnant at 0.4%.