Mortgage applications continue on the tear they started during the first week of 2018.  The Mortgage Bankers Association's (MBA's) Market Composite Index, a measure of loan application volume, increased 4.5 percent on a seasonally adjusted basis during the week ended January 19.  The gain came on the heals of 8.3 percent and 4.1 percent increases in the first two weeks of the year. The index was down 4 percent on an unadjusted basis, possibly because the week included the Martin Luther King holiday.

Both the Refinancing and Purchase Indexes saw gains.  The seasonally adjusted Purchase Index was up 6 percent from the week ended January 12, its fourth straight increase, and was the highest since April 2010. The unadjusted index rose 2 percent week-over-week and was up 7 percent from the same week in 2017.

The Refinance Index increased 1 percent from the previous week, but the refinance share of overall activity dipped to 49.4 percent from 52.2 percent.  It was the first time since late November that less than half of applications were for refinancing.  

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

FHA loans received 11.4 percent of all applications, down from 11.7 percent a week earlier while the VA share increased to 10.9 percent from 10.7 percent. The USDA share of total applications remained unchanged at 0.8 percent.  

Mortgage interest rates increased for all loan types on both a contract and an effective basis with several rates at multiple year highs. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $453,100 or less increased to 4.36 percent, its highest level since March 2017, from 4.33 percent a week earlier.  Points were unchanged at 0.54.   

The rate for jumbo 30-year FRM, loans with balances greater than $453,100, was also the highest since last March, rising to 4.31 percent, from 4.25 percent.  Points increased to 0.38 from 0.36.

Thirty-year FRM with FHA guarantees had an average interest rate of 4.37 percent, up 7 basis points from the previous week and the highest rate since September 2013.  Points were unchanged at 0.65. 

The rate for 15-year FRMs also reached the highest level since September 2013, 3.81 percent, with 0.52 point.  A week earlier the rate was 3.77 percent with 0.44 point.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) was 3.70 percent, the highest since April 2011 and 8 basis points higher week-over-week.  Points decreased to 0.39 from 0.48. The share of applications for ARMs was unchanged at 5.2 percent.

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