Despite high affordability, mortgage activity experiences mid-December drop
Posted on Wednesday, December 19, 2012 at 4:45:45 PM
Homebuying and mortgage refinancing activity has remained elevated as the end of the year approaches. However, slow seasonal trends may have finally set in during the week ending December 14.
Last week, the loan application volume plummeted 12.3 percent, according to a report from the Mortgage Bankers Association. This was partially caused by a drop in the Purchase Index, which fell 5 percent from the previous week.
"Despite the Federal Reserve’s announcement last week that it would purchase an additional $45 billion in Treasury securities per month as part of its continuing quantitative easing effort, rates increased in the second half of the week," said MBA vice president of research and economics Mike Fratantoni.
Meanwhile, the refinancing share of activity decreased 14 percent, the report said. Despite this decline, refinancing applications accounted for roughly 83 percent of activity, down from 84 percent a week earlier.
Consumers who want to make the transition to homeownership could start the process of getting approved for residential financing sooner, rather than later. Collecting vital financial documents and other material is an important part of starting the process.