Mortgage Bomb Cyclone! Mortgage Rates Drop 82 Basis Points Since October 21, Yet Purchase Apps Down -17.25% (Purchase Apps Down 36% Since Last Year, Refi Apps Down 85% Since Last Year)

The mortgage market is behaving like today’s bomb cyclone in terms of the weather. Bomb cyclone in that mortgage rates have dropped 7.16% on October 21, 2022 to 6.34% on December 16, 2022 (a drop of 82 basis points), but mortgage purchase and refinancing applications are not increasing like one would hope.

Mortgage applications increased 0.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 16, 2022.

The Refinance Index increased 6 percent from the previous week and was 85 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.1 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 36 percent lower than the same week one year ago.

But remember, The Federal Reserve is going to be lowering their target rate after they keep raising it.