Mortgage applications fall back, ending five weeks of gains

The winter housing market has arrived early.

Last week’s rising mortgage rates ended a five week streak of application winsinformed the Real Credit Board. The trade group’s application metrics were stagnant for the week ended Dec. 13, with the overall market composite index down 0.7% from the previous seven days.

The effective rate for 30-year fixed-rate mortgages rose eight basis points to 6.75% last week. Interest in conventional and Department of Veterans Affairs-backed mortgages moved the purchase index up 1% weekly, said Joel Kan, MBA’s vice president and deputy chief economist.

“Buyers remained active in the purchasing market, helped by gradually improving inventory conditions and a more positive view of the economy and the labor market,” Kan said in a press release.

The Refinance Index, meanwhile, fell 3% weekly, with VA refi activity falling back to earth after surging 85% last week. Although prices were still moving in the wrong direction earlier this week, refi activity remains up 41% from the same time a year ago.

Many MBA indices moved by single digits last week, while the government interest rate adjustment index rose 24.1% weekly. The effective rate for the 5/1 ARM rose over 20 basis points last week to 6.03%.

Rates for the 30-year jumbo and 15-year FRM rose a few basis points to 6.86% and 6.15%, respectively. While interest rates on Federal Housing Administration loans ticked up to 6.49%, points fell from 0.91 to 0.79 and the effective rate fell.

The slowdown also comes on the eve of the Federal Reserve’s Open Market Committee meeting, which it is expected to do weigh an interest rate cut despite persistent inflation. Mortgage rates were on the way down this summer before the FOMC’s first cut in September trigger some speed instability.