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The Mortgage Bankers Association (MBA) released its report on mortgage applications Thursday morning, noting a decrease of 9.8% in the group’s seasonally adjusted composite index for the two-weeks ending December 28. Mortgage interest rates dropped on four of five types of loans the MBA tracks.

On an unadjusted basis, the MBA’s composite index fell by 46% over the past two weeks. The seasonally adjusted purchase index decreased by 8% compared with the week ended December 19. The unadjusted purchase index dropped by 46% for the week and was 6% lower year over year.

Mortgage loan rates for top-tier a 30-year fixed-rate loan remained unchanged at 4.78% from two weeks ago, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were still paying 4.78% for the same loan. The yield on a 10-year U.S. Treasury note also dipped in the two-week period from 2.82% to 2.68% last night. A year ago the 10-year note yielded 2.46%.

Joel Kan, the MBA’s Associate Vice President of Economic and Industry Forecasting, commented:

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. 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.

The data that follow were reported on a week-over-week basis.

The MBA’s refinance index slipped by 12% week over week and the percentage of all new applications that were seeking refinancing decreased from 43.6% to 42.7%.

Adjustable rate mortgage loans accounted for 7.6% of all applications, unchanged compared with the prior week.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage slipped from 4.86% to 4.84%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.59% to 4.72%. The average interest rate for a 15-year fixed-rate mortgage dropped from 4.31% to 4.25%.

The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 4.23% to 4.16%. Rates on a 30-year FHA-backed fixed-rate loan dropped from 4.91% to 4.86%.

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