The Mortgage Bankers Association's (MBA) weekly mortgage applications survey for the week ending Dec. 17 showed that the market composite index dropped 18.6% on a seasonally adjusted basis from one week earlier.
Meanwhile, on an unadjusted basis, the index dipped 20% versus the previous week. The composite index measures mortgage loan application volume.
The refinance index dropped 24.6% from the previous week. This is the six consecutive week that it has dropped and is at its lowest level since the week ending April 30, according to the MBA.
The seasonally adjusted purchase index dropped 2.5% from a week earlier. The unadjusted purchase index dipped 4.9%t compared with the previous week and was 8.4% lower than the same week a year ago.
"Refinance application volume dropped sharply this week as mortgage rates held near six month highs," said Michael Fratantoni, MBA's vice president of research and economics. "Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months."
The MBA also reported that the refinance share of mortgage activity dipped to 72.3% of total applications from 76.7% the prior week. This is the lowest refinance share seen in the survey since early June 2010. The ARM share of activity increased to 6.1% from 5.5% of total applications from the previous week.