Mortgage Application Volume Falls

Mortgage application volume plummeted 19.5 percent during the week ending Dec. 14, according to the Mortgage Bankers Association's weekly application survey.

The trade group's application index fell to 653.8 from 811.8 the previous week.

Refinance volume tumbled 27.3 percent during the week, while purchase volume fell 10.6 percent. Refinance applications accounted for 53.2 percent of total mortgage applications, down from 57.6 percent during the prior week.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 653.8 means mortgage application activity is 6.538 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.

Volume fell as interest rates rose. The average interest rate for traditional, 30-year fixed-rate mortgages rose to 6.18 percent during the week ending Dec. 14, from 6.07 percent during the previous week.

The average interest rate for one-year adjustable-rate mortgages increased to 6.48 percent from 6.31 percent the prior week.