WASHINGTON (1/8/15)--Reflecting the turbulent mortgage application activity that marked the majority of the year, 2014 ended with two weeks of wild swings in action.
For the week ending Dec. 26, mortgage applications plummeted 18.2%, but then jumped 11.1% the week ending Jan. 2, according to the Mortgage Bankers Association's (MBA) mortgage applications survey (Economy.com Jan. 7).
Both the purchase and refinance indexes tracked by MBA fell the first week and climbed back up the following week, leaving overall applications no better than they were last year at this time.
"Much of this volatility can be attributed to seasonal factors and should therefore be taken with a grain of salt," said Michael McGrane, Moody's analyst (Economy.com). "Nevertheless, both the purchase and refinance indexes remain below their year-ago levels.
"Purchase activity is stuck in neutral, and although refinancing will not increase significantly, a slight decline in interest rates could nudge a small number of households to refinance."
The four-week moving average for refinance activity has fallen by 8.5% and sits 2.4% lower than last year's level at this time. Purchase applications have dropped 6.2% over the last month, and have slipped 6.3% behind their year-ago levels.
As for mortgage rates, the 30-year fixed mortgage rate fell 1 basis point over the past two weeks to 4.01%--a 10 basis-point drop from four weeks ago and a 71-point drop year-over-year, according to Moody's.
The five-year adjustable-rate mortgage rate climbed 9 basis points, meanwhile, ending the week at 3.19%, or 14 basis points below last year's number at this time.