Mortgage application volume bounced back from the previous holiday-shortened reporting period to end the week of October 21 up almost five percent.  The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey found applications for all mortgage types up 4.9 percent on a seasonally adjusted basis and 4.8 percent unadjusted.

Applications for both purchase mortgages and refinancing rose; the Refinancing Index by 4.4 percent and the Purchase Index by 6.4 percent adjusted and 6.1 percent unadjusted.  The unadjusted index was 2.7 lower than the same week in 2010.

The four-week moving average for all three indices decreased; the Market index by 3.61 percent, the purchase index by 0.71 percent and the Refinance Index by 4.41 percent.

Applications for refinancing made up 77.3 percent of the volume for the week, down from 77.6 percent during the week ended October 14.  Adjustable-rate mortgages (ARM) made up 5.9 percent of the volume, up 1 basis point from the previous week.

Looking back at September, MBA reported that investor activity rose slightly during the month with purchase applications for non-owner occupied properties up to 6.0 percent from 5.7 percent in August.  Mortgage applications for second homes decreased from 6.0 percent of purchase applications in August to 5.8 percent in September.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Rates for conforming mortgages (those with a loan balance of $417,500 or less) were relatively flat during the week while the effective rate rose for all products except the 30-year fixed rate mortgage (FRM).  The average contract rate for that product was unchanged at 4.33 percent with points decreasing from 0.48 point to 0.47 including the origination fee.  Rates for 30-year FHA-backed FRM decreased from 4.12 percent to 4.11 percent; points increased to 0.61 from 0.53. 

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.62 percent from 3.61 percent, with points increasing to 0.45 from 0.43.  .

Rates for jumbo 30-year FRMs - loans with a balance greater than $417,500 - rose from 4.64 percent with 0.45 point to 4.68 percent with 0.42 point.

The average contract interest rate for 5/1 ARMs increased to 3.11 percent with 0.50 point percent from 3.08 percent with 0.48 point. 

All rate quotes are for mortgages with an 80 percent loan-to-value ratio.

The MBA survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.