The volume of mortgage applications decreased 3.8 percent on a seasonally adjusted basis during the week ended February 22 according to the Mortgage Bankers Association (MBA). On an unadjusted basis the Market Composite Index, a measure of loan application volume, was down 3 percent compared to the previous week.  MBA made no adjustment in the numbers to compensate for the Presidents' Day holiday on Monday of that week.

The Refinancing Index was down 3 percent from the previous week although the refinance share of applications was unchanged at 77 percent.  Loans through the Home Affordable Refinance Program (HARP) accounted for 30 percent of those refinances, up from 29 percent the previous week.

The seasonally adjusted Purchase Index was down 5 percent for the week, reaching its lowest level since the last week of 2012.  On an unadjusted basis the purchase index was down 2 percent compared with the week ended February 15 but was 14 percent higher than the same week in 2011.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Interest rates reported by the MBA were largely unchanged. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,500 or less) decreased to 3.77 percent from 3.78 percent, with points increasing to 0.48 from 0.40.  The effective rate increased from the previous week.  The rate for 30-year FRM with jumbo loan balances (greater than $417,500) decreased to 3.93 percent with 0.37 point from 3.94 percent with 0.40 point and the effective rate decreased.

FHA-backed 30-year FRM had an average rate of 3.54 percent, unchanged from the previous week.  Points increased to 0.41 from 0.40 and the effective rate increased.

Rates for 15-year FRM were also unchanged at 3.03 percent.  Points dropped from 0.38 to 0.34 and the effective rate decreased.

Adjustable rate mortgages (ARM) garnered a four percent share of loan applications, the same as the prior week.  The average interest rate for 5/1 ARMS decreased to 2.65 percent from 2.66 percent with points increasing to 0.36 from 0.32.  The effective rate decreased.

Interest rates are based on loans with an 80 percent loan-to-value ratio and points include the origination fee.

MBA derives its application volume and interest rate data from a weekly survey of mortgage bankers, commercial banks and thrifts.  The survey has been conducted since 1990 and the base period for all indices is March 16, 1990 =100.