WASHINGTON (12/19/13)--Mortgage market activity fell by a seasonally-adjusted 5.5% for the week ending Dec. 13, as rising interest rates continue to discourage prospective applicants.
The two components that make up the Mortgage Bankers Association's composite index both declined. A gauge of refinance activity was down by 4.3% and the purchase applications index fell by 6.1%, according to a weekly MBA mortgage applications report released Wednesday.
Refinancing, as a share of total mortgage activity, increased to 66%, from 65% the week before, while the adjustable-rate mortgage share of market activity remained steady at 8%.
Rates for 30-year fixed-rate mortgages rose to 4.62% from 4.61%, while rates for 30-year jumbo mortgages and five-year adjustable rate mortgages rose to 4.61% and 3.2%, from 4.59% and 3.11%.
Moody's analysts said that rising interest rates and home values are putting off potential buyers. They pointed to National Association of Realtors data published Tuesday, which indicated that home ownership is more costly than it has been since December 2008 (Economy.com Dec. 18). The interest rate for 30-year fixed rate mortgages is 16 basis points higher on a monthly basis, 112 basis points higher on an annual basis, and up by 100 basis points since May. The five-year adjustable mortgage rate is 59 basis points higher on an annual basis.
A four-week moving average of refinance activity has fallen by 19.3% over the past month and 65% over the past year, said MBA.
Purchase applications are at about the same level on a monthly basis, but down by 10% on an annual basis. A 12-week moving average of purchase activity is at its lowest level since September last year, according to Moody's.
A report released Tuesday by the National Association of Homebuilders showed builders of single family homes expressing greater confidence in the economy this month, in spite of weak mortgage market activity (Market News Dec. 18). (See News Now's article, November Home Building at Fastest Pace since 2008.)