Mortgage application volume fell across the board for the second straight time during the week ended February 13, 2015.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume declined substantially from the previous week, down 13.2 percent on a seasonally adjusted basis from the week ended February 6 and 12 percent on an adjusted basis.

All of the Composites components fell compared to the previous week as well.  MBA's Refinance Index decreased 16 percent and the refinance share of applications lost 3 percentage points to 66 percent.  The seasonally adjusted Purchase Index decreased 7 percent from one week earlier.  The unadjusted Purchase Index decreased 2 percent compared with the previous week but was able to remain 1 percent higher than during the same week in 2014.

Refinance Index vs 30 Yr Fixed

Purchase Index vs 30 Yr Fixed

"Mortgage rates increased to their highest level since the beginning of the year last week, and application volume dropped sharply as a result, particularly for refinances. The market index declined to its lowest level since the week ending January 2nd as purchase application activity decreased seven percent and refinance applications decreased 16 percent. Refinance volume fell particularly for larger loans, as evidenced by the decline of almost $25,000 in the average loan size for a refinance loan," said Mike Fratantoni, MBA's Chief Economist.

The FHA share of total applications increased to 15.2 percent from 14.1 percent last week and the VA share eased back to 8.0 percent from 8.3 percent. The USDA share of total applications increased to 0.9 percent from 0.7 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) increased to 3.93 percent from 3.84 percent, with points increasing to 0.35 from 0.31. The average rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.92 percent with 0.28 point from 3.90 percent, with 0.19 point.  The effective rate for both 30-year FRMs increased from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.73 percent from 3.72 percent, with points decreasing to 0.12 from 0.13.  The effective rate was unchanged.  The average contract interest rate for 15-year fixed-rate mortgages increased by 9 basis points to 3.24 percent.  Points increased to 0.35 from 0.29 and the effective rate was also up.

The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent of total applications from 5.7 percent .The average contract interest rate for 5/1 ARMs increased to 3.09 percent from 3.07 percent, with points increasing to 0.47 from 0.44. The effective rate increased from last week. 

MBA's Weekly Mortgage Applications Survey 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 rates presume an 80 percent loan-to-value ratio and points include the origination fee.  The survey has been conducted since 1990.