Home prices are on the rise at the close of the year.
The average purchase loan increased for the second straight week to $416,200. That happens to be the second-highest amount ever.
"The elevated loan size is an indication that activity is more on the higher end of the market," said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. "Home-price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand."
Those higher prices could be slowing the overall market as demand for mortgage applications declined 0.6% in the past week, according to the weekly survey from the Mortgage Banker's Association.
The decline was led by purchase applications which were down by 3%.
The refinancing index jumped 2% as homeowners took advantage of lower interest rates.
"The 30-year fixed rate decreased to 3.27 percent – its lowest level in four weeks – and helped spur an increase in refinances across all loan types. FHA and VA refinances jumped 4 percent and 12 percent, respectively," added Kan.
The refinance share of mortgage activity increased to 65.2 percent of total applications.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.