US mortgage applications fall by most in a month

(Sharecast News) - Mortgage applications in the United States retreated last week, almost erasing the previous week's gain, falling by their most in a month,. The Mortgage Bankers Association's market composite index, which measures the volume of mortgage applications each week, fell 3.8% on a seasonally adjusted basis over the seven days to 12 December from one week earlier.

That followed a 4.8% increase the week before, and registered the sharpest drop since the week to 14 November.

Applications to refinance fell 4.0% week-on-week, while mortgage applications for house purchases were down 3.0%.

"Mortgage rates inched up last week following the FOMC meeting, as investors interpreted the comments to signal that we are near the end of this rate cutting cycle. As a result, mortgage applications declined slightly," said Mike Fratantoni, MBA's senior vice president and chief economist.

"Purchase application volume typically drops off quickly at the end of the year, and this shifts the mix of the business, with the refinance share reaching 59% last week, the highest level since September. However, refinance activity has remained mostly the same for the past month as rates continue to hold at around the same narrow range."