Mortgage application volume rose 2.5% from the prior week, even as interest rates reached two-year highs, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Dec. 16 found that the purchases and refinance indexes each increased 3% from the previous week.
The seasonally adjusted purchase index decreased 3% from one week earlier, while the unadjusted purchase index decreased 7% compared with the previous week and was 2% higher than the same week one year ago.
As a share of overall applications, refis expanded to 57.9% from 57.2% the previous week. The adjustable-rate mortgage share of activity rose to 6.5% of total applications, its highest level since February.
The Veterans Administration share of applications rose to 12% from 11.9%.
Meanwhile the Federal Housing Administration share dropped to 11.5% from 11.6%, and the US Department of Agriculture share slipped to 0.8%. The average loan size for purchase applications lifted to its second-highest level in the survey’s history at $312,000.
The interest rate for 5/1 ARMs leaped to its highest level since September 2013 at 3.45%, up 17 basis points from 3.28% last week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.41% from 4.28%, representing its highest level since May 2014. The 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) hit its highest level since April 2014, with the average contract rate rising to 4.36% from 4.29%.
Also reaching its highest level since April 2014 was the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA, which jumped 13 basis points to 4.15%. Similarly, the interest rate for the 15-year fixed-rate mortgage the average increased 12 basis points to 3.64%, for its highest level since January 2014.