The rebound in mortgage application volume reported by the Mortgage Banker's Association (MBA) last week was short lived as both refinancing and purchase activity retreated again during the week ended June 14. MBA's Market Composite Index, a measure of loan application volume was down 3.3 percent on a seasonally adjusted basis from the week ended June 7 and 4 percent on an unadjusted basis.

Both the Refinance Index and the seasonally adjusted Purchase Index were down 3 percent from the previous week; the unadjusted Purchase Index fell by 4 percent but was 12 percent above the index during the same week in 2012. Applications for refinancing made up 69 percent of all mortgage applications, unchanged from the week before, and 31 percent of refinance applications were through the Home Affordable Refinance Program (HARP), 2 percentage points more than the week before.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

The share of applications for home purchase that went to government-backed mortgages was 29 percent for the second week in a row. This is the lowest level for those applications since MBA began tracking them.

Mortgage rates were mixed. The average contract rate for 30-year fixed-rate mortgages (FRM) with conforming balances of $417,500 or less increased to 4.17 percent with 0.41 point from 4.15 percent with 0.48 point, the sixth consecutive week the rate has increased and the highest it has been since March 2012. The effective rate also increased.

The contract and effective rates for the jumbo 30-year FRM (loan balance above $417,500) slipped; the contract rate went from 4.25 percent with 0.32 point to 4.23 percent with 0.34 point.

FHA-backed 30-year FRM increased to 3.85 percent, the highest rate since April 2012, from 3.81 percent. Points decreased to 0.22 from 0.26 and the effective rate increased.

The average contract rate for 15-year fixed-rate mortgages decreased to 3.30 percent from 3.32 percent, with points increasing to 0.39 from 0.38. The effective rate decreased from the previous week.

The share of applications that went to adjustable rate mortgages (ARMS) remained unchanged at 7 percent during the week. The contract interest rate for 5/1 ARMs increased 3 basis points to 2.81 percent, the highest rate since June 2012 with points increasing to 0.35 from 0.30. The effective rate increased.

Interest rate information is for loans with an 80 percent loan-to-value ratio and points include the origination fee. MBA's application data and rate quotes are derived from its Weekly Mortgage Application Survey which has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts and covers over 75 percent of all U.S. retail residential mortgage applications.  Base period and value for all indexes is March 16, 1990=100.