The volume of mortgage applications increased again during the week ended January 17 according to information released this morning by the Mortgage Bankers Association (MBA).  The MBA's Market Composite Index, a measure of that volume, increased 4.7 percent on a seasonally adjusted basis from one week earlier and was up 7 percent on a non-adjusted basis.

The Refinance Index increased 10 percent and the share of applications that were for refinancing rose from 62 percent the week ended January 10 to 64 percent.  This was the largest market share for refinancing in a month.

Refinance Index vs 30 Yr Fixed

The seasonally adjusted Purchase Index was down 4 percent from the previous week.  The unadjusted index was up 2 percent week-over-week but was 15 percent lower than the same week in 2012.

Purchase Index vs 30 Yr Fixed

Both contract and effective rates decreased during the week to levels last seen before the New Year.  Thirty-year fixed rate mortgages (FRM) with conforming balances of $417,000 or less had an average contract rate of 4.57 percent with 0.36 point compared to 4.66 percent with 0.33 point the previous week.

The jumbo 30-year FRM (balances in excess of $417,000) also had a contract rate of 4.57 percent, down from 4.58 percent.  Points decreased from 0.24 to 0.18.  Both the conforming and the jumbo 30-year mortgages last saw rates at this level in November.

FHA-backed 30-year FRM had a contract rate of 4.24 percent, also the lowest rate since November, compared to 4.29 percent the previous week.  Points increased from 0.17 to 0.23.

Fifteen-year FRM had an average rate of 3.68 percent, down 4 basis points from the previous week and the lowest rate since December.  Points decreased from 0.37 to 0.29.

Seven percent of applications during the week were for adjustable rate mortgages (ARM), slightly lower than the week before.  The average contract rate for the 5/1 ARM decreased to 3.23 percent with 0.37 point from 3.28 percent with 0.47 point.  The new rate was the lowest so far in 2013.   

MBA's survey covers over 75 percent of all U.S. retail residential mortgage applications, and includes information from mortgage bankers, commercial banks and thrifts. It has been conducted since 1990 and the base period and value for all indexes is March 16, 1990=100.  Interest rates are quoted for loans with an 80 percent loan-to-value ratio and points include the origination fee.