After falling 27% during the two weeks ended Jan. 1, mortgage application volume rebounded, increasing 21.3% during the week ended Jan. 8, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume increased 76% compared with the previous week.
Applications for refinances increased 24%, on slightly lower rates, while applications for purchases increased 18%.
On an unadjusted basis, applications for purchases increased 74% compared with the previous week and increased 19% compared with the same week one year ago.
Lynn Fisher, vice president of research and economics for the MBA, says the increase brought the index to its second-highest level since May 2010 on a seasonally adjusted basis.
‘Bolstered by strong fourth-quarter growth in jobs and continuing low rates, the results are similar to levels we saw in early December, suggesting that the purchase market's strong finish to 2015 may be continuing,’ Fisher says in a statement. ‘While refinances also increased on a holiday-adjusted basis, refinance activity was down 38 percent relative to a year ago, when rates dove below four percent.’
The refinance share of mortgage activity increased to 55.8% of total applications from 55.4% the previous week.
The average rate for a 30-year, fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.12%, down from 4.20%.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.02%, down from 4.09%.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.90%, down from 3.95%.
The average rate for a 15-year FRM was 3.42%, down from 3.47%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.14%, down from 3.19%.
The ARM share of activity increased to 5.1% of total applications.
Looking at application volume by loan type, applications for loans backed by the FHA were 14.4% of all applications – down from 14.6% the previous week. The Veterans Affairs share of total applications was 12.2%, down from 12.9%, and the U.S. Department of Agriculture share of total applications was 0.6%, down from 0.8%.