After just barely moving off 12 year lows in the previous week, Mortgage Applications bounced back in the first full week after the holiday season, increasing 11.9 percent on a seasonally adjusted basis during the week ended January 10.     The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application had been adjusted for the previous week, ended January 3, to account for the New Year holiday. The unadjusted index posted an increase of 61 percent.

The Refinance Index rose 11 percent and applications for refinancing fell to 62 percent of total applications from 63 percent the previous week.  This was the lowest share for refinancing since last September.

Refinance Index vs 30 Yr Fixed

The seasonally adjusted Purchase Index increased 12 percent and the unadjusted index was up 66 percent from the previous week and was 10 percent lower than in the same week in 2013.  MBA said the adjusted Purchase Index was at a level similar to that of mid-November.

Purchase Index vs 30 Yr Fixed

Interest rates started the new year on the downslope with both contract and effective rates decreasing.  The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming balances of $417,000 or less decreased to 4.66 percent with 0.33 point from 4.72 percent with 0.28 point.  The jumbo version of the 30-year FRM (loan balances above $417,000) had an average rate of 4.58 percent with 0.24 point compared to 4.66 percent with 0.12 point the previous week.

The contract rate for 30-year FRM backed by the FHA decreased to 4.29 percent from 4.36 percent, with points increasing to 0.17 from 0.15.

The average contract interest rate for 15-year fixed-rate mortgages fell 5 basis points to 3.72 percent.  Points increased to 0.37 from 0.34.

The volume of adjustable rate mortgages (ARMs) remained at an 8 percent share during the week.  The average rate for the 5/1 ARMs decreased to 3.28 percent from 3.33 percent, with points increasing to 0.47 from 0.44.

MBA's Weekly Mortgage Application 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. Interest rates are reported for loans with an 80 percent loan-to -value ratio and points include the origination fee.  Base period and value for all indexes is March 16, 1990=100.