After decreasing during the holiday shortened week ended January 25 the pace of mortgage applications returned last week to the upward track it had been on since the first of the year.  The Mortgage Bankers Association's (MBA) Market Composite Index, a measure of application volume, rose 3.4 percent on a seasonally adjusted basis from the week ended February 1.  On an unadjusted basis the volume was up 16 percent compared to the previous week.

The seasonally adjusted Purchase Index was up 2 percent to the highest level since early May 2010.  On an unadjusted basis it soared 21 percent week-over-week and was 16 percent higher than during the same week in 2011.  The Refinance Index was up 4 percent but the refinancing share of applications decreased to 78 percent from 79 percent, the lowest share for refinancing since last July.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Both contract and effective mortgage interest rates increased across the board. The average contract rate for 30-year fixed-rate mortgages (FRM) with conforming balances of $417,500 or less increased to 3.73 percent with 0.43 point from 3.67 percent with 0.42 point.  This was the seventh week out of the past eight that this rate has risen. 

The rate for jumbo 30-year FRM (balances above $417,500) rose 1 basis point to 3.96 percent while points declined from 0.39 to 0.38. 

FHA-backed 30-year FRM had a contract rate of 3.53 percent with 0.38 point compared to 3.48 percent with 0.33 point the previous week. 

The 15-year FRM rate rose to 3.0 percent from 2.95 percent.  Points decreased to 0.33 from 0.38. 

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) jumped 12 basis points to 2.72 percent but points decreased to 0.30 from 0.33.  ARMs had a 4 percent share of mortgage volume, unchanged from the previous week.

MBA's data is derived from a weekly survey it has conducted since 1990 among mortgage bankers, commercial banks, and thrifts.  Interest rate information is for loans with an 80 percent loan-to-value ratio and points include the origination fee.  Base period and value for all indexes is March 16, 1990=100.