Mortgage loan application volume increased by an astounding 23.1% on a seasonally adjusted basis for the week ended Jan. 13, as interest rates on three varieties of fixed-rate loans hit all-time lows, according to the Mortgage Bankers Association. The results for the current survey include an adjustment to account for the New Year’s Day holiday.
“Interest rates dropped last week due to continuing anxieties regarding the fragile economic situation in Europe,” said Michael Fratantoni, MBA’s vice president of research and economics. “With mortgage rates reaching new lows, refinance volume jumped and MBA’s refinance index reached its highest level in the last six months. Purchase activity also increased as buyers returned to the market after the holiday season.”
The Refinance Index rose by 26.4% from the previous week, and the market share of refi applications increased to 82.2% from 80.8%. This represents the highest share of refi applications since the week of Oct. 22, 2010. Purchase application volume was up 10.3% on a seasonally adjusted basis from last week. It was up 2.2% on an unadjusted basis from the same week in 2011.
MBA said all-time survey lows for fixed-rate mortgages were seen in the following loan types: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) fell by five basis points to 4.06%; the average contract interest rate for 30-year Federal Housing Administration-insured loans declined five basis points to 3.91%; and the average contract interest rate for 15-year FRMs declined seven basis points to 3.33%.
However rates for 30-year FRMs with jumbo loan balances bucked the trend, with the average contract rate increasing by six basis points to 4.40%.