The Mortgage Bankers Association, which traditionally closes its office during the end of the year holiday season, played catchup today with results from its Weekly Mortgage Applications Survey for the two weeks ended January 2.  While two weeks are included in the survey, comparisons are to the week ended December 19.  Each of the two weeks covered in the report were adjusted to account for the Christmas and the New Years' holiday respectively.

Application volume as measured by MBA's Market Composite Index was down during the week by 9.1 percent on a seasonally adjusted basis compared to two weeks earlier.  On an unadjusted basis the index unsurprisingly plummeted by 37 percent. 

The Refinance Index, which is not seasonally adjusted, was down 12 percent from two weeks earlier while the share of refinancing applications rose to 65 percent of all applications.  The market share comparison is to the week ended December 26 when refinancing made up 63 percent of applications.  During the week ended December 19 refinancing had a 67 percent share.

Refinance Index vs 30 Yr Fixed

The seasonally adjusted Purchase Index decreased 5 percent for the period while the unadjusted index was down 33 percent.  It was down 8 percent from the same week a year earlier.

Purchase Index vs 30 Yr Fixed

Applications for most government-backed mortgages earned a higher market share than during the previous week.  FHA mortgage applications increased to 9.3 percent of the total compared to 9.2 percent during the week ended December 26 while the VA share was 10.7 percent compared to 10.5 percent.  The share of USDA-backed mortgages was unchanged at 0.9 percent. 

Mortgage interest rates are also reported relative to the week ended December 26 and both contract and effective rates were lower across the board.  The average contract rate for 30-year conforming fixed-rate mortgages (FRM) with balances of $417,000 or less was 4.01 percent with 0.28 point compared to 4.04 percent with 0.35 point the previous week. 

Jumbo 30-year FRM had an average contract rate which declined from 4.05 percent to 3.99 percent.  Points decreased to 0.24 from 0.37.

Thirty-year FRM backed by the FHA had a rate of 3.82 percent, down 1 basis point from the previous week.  Points decreased to -0.03 from 0.08.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.24 percent from 3.32 percent.  Points fell to 0.30 from 0.36

The share of applications for adjustable rate mortgages (ARMs) was at its lowest rate in several years, dropping to a 4.9 percent share.  For most of 2014 ARMS consistently comprised 8 percent of mortgage applications.  The average contract interest rate for 5/1 ARMs decreased to 3.19 percent from 3.26 percent, with points increasing to 0.51 from 0.48.

MBA's survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.  Average and effective interest rate information is based on loans with an 80 percent loan to value ratio and points include the origination fee.