Mortgage applications were higher during the last week of January as interest rates fell to lows last seen in May 2013.
The Mortgage Bankers Association’s market composite index increased 1.3% on a seasonally adjusted basis for the week ending Jan. 30. A week earlier, mortgage loan application volume declined 3.2%.
The refinance index was up 3% from the previous week, while the purchase index dropped 2%.
“FHA refinance applications increased 76.5% in response to a reduction in annual mortgage insurance premiums which took effect Jan. 26,” said Lynn Fisher, vice president of research and economics for the Mortgage Bankers Association.
“Conventional refinance volume was up only 0.5% for the week while VA refinance volume was down 4.3%.”
Meanwhile, FHA purchase applications rose 12.4% week over week, the Washington-based trade group reported.
The average contract interest rate for fixed 30-year conforming mortgages below $417,000 decreased four basis points, to 3.79%. Jumbo loans above $417,000 saw the average 30-year fixed mortgage compress five basis points, to 3.82%. Mortgages backed by the FHA had 30-year rates decline two basis points, to 3.69%.
Additionally, the average 15-year interest rate dropped one basis point, to 3.14%.
The MBA survey covers over 75% of all U.S. retail residential mortgage applications.