On an unadjusted basis, the composite index increased by 42% week over week. The seasonally adjusted purchase index increased by 6% compared with the week ended December 30. The unadjusted purchase index increased by 45% for the week and is now 18% lower year over year.
The MBA’s refinance index increased by 4% week over week, and the percentage of all new applications that were seeking refinancing slipped from 52.2% to 51.2%.
Adjustable rate mortgage loans accounted for 5.5% of all applications, up from 5.4%.
Mortgage rates have continued to dip as bond markets make their first tentative buys after strong selling in December. When bond traders sell, mortgage rates rise; when they buy, rates fall. The rate changes have been modest so far, but they are encouraging for prospective borrowers.
One more encouraging note on the housing market: the U.S. foreclosure inventory dropped to 26,000 properties in the month of November, within sight of the pre-crisis average level of 21,000.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.39% to 4.32%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.37% to 4.27%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.64% to 3.56%.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.28% to 3.32%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.22% to 4.08%.