Applications for U.S. home mortgages were unchanged for the week ended Dec. 17 from the prior week as an increase in refinancing offset a decrease in purchases, an industry trade group said.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage activity was flat at 689.3 in the week ended Dec. 17, following a 1.0 percent drop the previous week.
Fixed 30-year mortgage rates averaged 5.69 percent last week, excluding fees, up from 5.65 percent one week earlier.
The MBA's seasonally adjusted index of refinancing applications rose 5.7 percent to 1958.2, following a 2.0 percent decline the prior week. Refinancings as a share of total applications increased to 48.9 percent compared with 46.0 percent the prior week.
"The combination of the level of mortgage rates and the season of the year lead me to believe that some pent up demand for refinance activity may be building that might not be fully reflected in the seasonal adjustment factor," said Jack Radin, senior vice-president of capital markets at MortgageIT
The association's purchase index, a gauge of loan requests for home purchases, declined 3.6 percent to 471.1, on the heels of a 0.4 percent decline the previous week.
The adjustable-rate (ARM) share of activity increased to 34.4 percent from 34.2 percent of total applications.
Treasury yields, which lenders use to set mortgage rates, remain low by historic standards.
"This (low Treasury yields) continues to drive the overall housing market despite recent Fed increases in short term rates," said David E. Eagan, partner at MacLachlan & Eagan LLP, a real-estate law firm. "This should continue until there is a marked increase in inflationary pressures, which will ultimately drive long-term rates and mortgage rates upward."