The Mortgage Bankers Association returned from its holiday hiatus today, issuing its first update on mortgage applications' activity since that for the week ended December 16.  The results thus include data for the last two weeks and an adjustment to account for the Christmas holiday.

The Market Composite Index, a measure of application volume, for the week ended December 30 was down 12 percent on a seasonally adjusted basis compared to the December 9 summary.  Before the adjustment, the drop in application activity was 48 percent.

The Refinance Index decreased 22 percent from two weeks earlier and the seasonally adjusted Purchase Index declined by 2 percent. The unadjusted Purchase Index was 41 percent lower than the two-week old reading and lost 1 percent when compared to the same week in 2015.  

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

While the index changes were calculated compared to two weeks earlier, reports of relative shares of applications are presented relative to the previous week only.

The refinance share of mortgage activity increased to 52.2 percent of total applications from 51.8 percent the week ended December 23 but was down from a 57.9 percent share during the week ended December 16.   

The FHA share of total applications increased to 11.6 percent from 10.7 percent and the VA share dipped to 12.3 percent from 12.4 percent.  USDA applications accounted for 1.1 percent of the total, up from 1.0 percent.  The USDA shares both weeks were the highest in recent memory.

Most interest rates have pulled back from their recent one- and two-year highs and effective rates were mixed.  The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $417,000 or less decreased to 4.39 percent from 4.45 percent, with points increasing to 0.43 from 0.39.  The effective rate decreased from last week. 

The jumbo version of the 30-year FRM, loans with balances greater than $417,000, fell 4 basis points to 4.37 percent.  Points jumped to 0.44 from 0.21, pulling the effective rate higher.

Thirty-year FRM backed by the FHA had a contract rate of 4.22 percent, unchanged from a week earlier.  Points changed to 0.34 from 0.44, and the effective rate was down.   

The average contract interest rate for 15-year FRM was 3.64 with 0.38 point.  The previous week the rate had been 3.70 with 0.34 point.  The effective rate declined.

The adjustable-rate mortgage (ARM) share of activity, which had hit a 10-month high of 6.5 percent before the holiday, dropped back to 5.4 percent in the current report.  The average contract interest rate for 5/1 ARMs decreased to 3.28 percent from 3.41 percent, with points increasing to 0.42 from 0.29.  The effective rate was also down.

MBA's Mortgage Applications Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information assumes a loan with an 80 percent loan to value ratio and points that include the origination fee.