That is the lowest level since September. The rate has fallen 24 basis points in the last four weeks but ended the year still 62 basis points higher than one year ago.
“Investors continued to show a preference for safer U.S. Treasurys, as concerns over U.S. and global economic growth, along with uncertainty over the current government shutdown, drove rates lower,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Applications to refinance a home loan decreased 12 percent over the two weeks and ended last week 35 percent below the same week one year ago. While rates were down, most borrowers who qualified already refinanced to far lower rates. The pool of borrowers who could benefit from a refinance, simply on the rate change, is very small.
Mortgage applications to purchase a home fell 8 percent during the last two weeks and ended 6 percent lower than the same week one year ago. Purchase volume is at the lowest level since February 2017.
While most housing data can be “noisy” around the holidays, depending on which days of the week businesses are closed, there is arguably a slowdown in the housing market. Buyers are still facing high prices, although the gains continue to shrink. Local markets are seeing an increased supply of homes for sale, and that has some sellers reducing their asking prices. But buyers are also faced with rising uncertainty in the economy, a volatile stock market that has seen significant losses, and a partial government shutdown.
“Part of the decline in mortgage applications was possibly because of the government shutdown, as concerns over delays in FHA application processing times likely contributed to the weakness in activity,” Kan said.