The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a increase of 11.9% in the group’s seasonally adjusted composite index. The previous week’s results included an adjustment for the New Year’s holiday.
The seasonally adjusted purchase index increased by 12.0% from the prior week’s report, but it is at a similar level to that observed in mid-November 2013. On an unadjusted basis, the composite index increased by 61% week-over-week. The unadjusted purchase index increased by 66% for the week, but it is 10% lower year-over-year.
The MBA’s refinance index increased by 11%. But the share of refinancings fell by one point, totaling 62% of all applications. Adjustable rate mortgage loans accounted for 8.0% of all applications, unchanged from the prior week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.72% to 4.66%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.66% to 4.58%. That was the first week-on-week decline in 30-year mortgage rates in 10 weeks. The average interest rate for a 15-year fixed-rate mortgage fell from 3.77% to 3.72%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.33% to 3.28%.
This surprise increase in purchase applications could signal a strong spring season, now that the holidays are over. Mortgage bankers have been concerned that the new mortgage rules that took effect last Friday would knock some potential borrowers out of the market. Earlier this week, the MBA lowered its forecast on 2014 mortgage originations by $7 billion to $1.12 trillion, based on declining mortgage application activity and rising interest rates.