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Mortgage Applications Drop 12.3% as Refinances Plunge

Mortgage applications swooned 12.3% in the week ended Dec. 14, as refinances were off 14% and purchases decline 5%, according to data from the Mortgage Bankers Association's weekly mortgage applications survey.

"Despite the Federal Reserve's announcement last week that it would purchase an additional $45 billion in Treasury securities per month as part of its continuing quantitative easing effort, rates increased in the second half of the week," said Mike Fratantoni, MBA's vice president of research and economics. "As a result, refinance applications dropped sharply to the lowest level in over a month."

Refinances accounted for 83% of total applications, down from 84% the previous week. HARPs were one out of every four refinance application. Adjustable-rate mortgages rose to 3% of applications.

The average interest rate for 30-year fixed-rate mortgages with conforming balances ($417,500 or less) rose to 3.50% from 3.47%, while the average 15-year fixed-rate mortgage dipped to 2.83%, the lowest rate in the history of the survey, from 2.85%.

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