Rising mortgage rates had a significant impact on mortgage applications in the latest Mortgage Bankers Association (MBA) survey released at the end of 2024. Application volume decreased notably, even after adjusting for the holiday season.
According to the MBA report, mortgage demand dropped by 21.9% in the week ending Dec. 27 from two weeks prior. Refinance applications led the decline, falling by 36%, while purchase loan applications decreased by 13%. Year-over-year, refinance demand increased by 10% while purchase demand decreased by 10%.
Mike Fratantoni, the MBA’s senior vice president and chief economist, noted that mortgage rates had risen to nearly 7% for 30-year fixed-rate loans by the end of 2024. This increase in rates during a typically slow housing period resulted in declines in both refinance and purchase applications.
Data from HousingWire’s Mortgage Rates Center also showed a consistent upward trend in home loan costs in the final weeks of 2024. Rates for 30-year conforming loans averaged 7.10% on Thursday, increasing by 21 basis points in the past two weeks. Meanwhile, rates for 15-year conforming loans rose to 7.02%.
After several weeks of growth in November and December, the MBA’s index saw a decline in the week ending Dec. 13. By the end of December, the refinance share of all applications dropped to 39.4%, down nearly 5 percentage points from two weeks earlier. FHA loan applications decreased to a market share of 16.6%, while VA loan applications rose to a share of 15.7%.
Across different loan types, interest rates increased. Contract interest rates for 30-year fixed loans with conforming balances rose to 6.97%, while 30-year jumbo loans jumped to 7.13%. Rates for FHA loans and 15-year fixed loans also saw slight increases, while rates for 5/1 adjustable-rate mortgages decreased.
The MBA’s weekly applications survey covers residential mortgage applications from retail and consumer-direct channels and is benchmarked at 100 in March 1990.