As rates rose the volume of mortgage applications fell during the week ended February 8 according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Application Survey.  The seasonally adjusted Market Composite Index, a measure of loan application volume, was 6.4 percent lower than the week ended February 1 and the unadjusted index was 5 percent lower.

The Refinance Index was down 6 percent although refinancing retained the previous week's 79 percent share of mortgage applications. The percentage of loans refinanced through the Home Affordable Refinance Program (HARP) was also unchanged at 28 percent.

The seasonally adjusted Purchase Index decreased 10 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 15 percent higher than the same week one year ago.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Most interest rates increased during the week, and contract rates for 15-year, and both conventional and jumbo 30-year fixed-rate mortgages (FRM) rose to the highest levels since September.   The average contract rate for a conventional (loan balances of $417,500 or less) 30-year FRM rose to 3.75 percent from 3.73 percent with points unchanged at 0.43.  The jumbo version of the loan increased to 3.98 with 0.36 point from 3.96 percent with 0.38 point.  The effective rate for both 30-year loan types also increased.    

The average contract interest rate for 30-year FRM backed by the FHA remained unchanged at 3.53 percent, with points increasing to 0.39 from 0.38 and the effective rate increased.

The rate for 15-year fixed-rate mortgages increased one basis point to 3.01 percent while points decreased to 0.28 from 0.33.  The effective rate decreased from the previous week.

The contract rate for 5/1 adjustable rate mortgages (ARMs) fell from 2.72 percent with 0.30 point to 2.66 with 0.31 point.  The effective rate decreased.  The ARM share of activity increased to 4 percent of total applications.

Rates quoted are for loans with loan-to-value ratios of 80 percent.  Points include the origination fee.

MBA's survey has been conducted weekly 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.