Mortgage applications decreased 9.8 percent from two weeks earlier, as economic concerns and uncertainty around the government shutdown drove home-loan rates lower

The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 28, 2018, included adjustments to account for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.8 percent on a seasonally adjusted basis from two weeks earlier, the MBA said.

"Mortgage applications fell over the past two weeks - even as the 30-year fixed-rate mortgage decreased to 4.84 percent, its lowest since September 2018. Investors continued to show a preference for safer U.S. Treasuries, as concerns over U.S. and global economic growth, along with uncertainty over the current government shutdown, drove rates lower," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

"Even with lower borrowing costs, both purchase and refinance applications decreased over the two-week holiday period, as both conventional and government applications dropped. Part of the decline in mortgage applications was possibly because of the government shutdown, as concerns over delays in FHA application processing times likely contributed to the weakness in activity." 

While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.

The refinance share of mortgage activity decreased to 42.7 percent of total applications from 43.6 percent the previous week. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.25 percent from 4.31 percent.

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