US home-purchase applications fall in week including Christmas

US MORTGAGE applications for home purchases declined from an almost five-month high as borrowing costs ticked higher in the final week of 2023.

The Mortgage Bankers Association’s (MBA) gauge of mortgage applications to buy a home slid 7.6 per cent, the most since April, in the week ended Dec 29. The contract rate on a 30-year fixed mortgage edged up five basis points to 6.76 per cent.

In the prior week, the home-purchase index rose to the highest since late July as the 30-year rate dropped to a seven-month low. The figures tend to be volatile around holidays, and the last week included Christmas.

The MBA’s overall index of mortgage applications, which includes both purchases and refinancings, decreased 10.7 per cent last week, the most since February.

While mortgage rates have fallen from almost 8 per cent in October and helped stabilise housing demand, a sustained decline in borrowing costs to much lower levels is probably needed to put the housing market on a better trajectory.

The MBA survey uses responses from mortgage bankers, commercial banks and thrifts and has been conducted weekly since 1990. The data cover more than 75 per cent of all retail residential mortgage applications in the US. BLOOMBERG