Despite the shorter holiday week, mortgage applications rose 11.7 percent on a seasonally adjusted basis during the week ended January 4 and 49 percent on a seasonally unadjusted basis.  The Mortgage Bankers Association's (MBA) Market Composite Index's seasonally adjusted figure included an additional adjustment to account for the New Years Day holiday.

The Refinance Index increased 12 percent from Christmas week and the refinancing share of mortgage activity remained constant at 82 percent.  The share of refinancing done through the Home Affordable Refinancing Program (HARP) decreased to 25 percent from 27 percent the prior week. 

The Purchase Index was up 10 percent on a seasonally adjusted basis and 49 percent on an unadjusted basis compared to the week ended December 28. Compared to the last pre-holiday week (the week ended December 21) the Refinancing Index was up less than one percent and the seasonally adjusted Purchasing Index was down 8 percent. 

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Both contract and effective mortgage rates rose during the week with the rate for the 30-year fixed-rate mortgage (FRM) reaching its highest contract level since November 2012.  The average rate for the conventional 30-year FRM (with balances of $417,500 or less) increased to 3.61 percent with 0.41 point from 3.52 percent with 0.48 point.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.78 percent from 3.75 percent, with points increasing to 0.38 from 0.30. 

FHA-backed 30-year FRM rates increased to an average of 3.35 percent from 3.34 percent, with points increasing to 0.69 from 0.61.

Fifteen-year FRM had an average rate of 2.88 percent with 0.39 point compared to 2.86 percent with 0.27 point the previous week. 

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 2.64 percent from 2.65 percent, with points decreasing to 0.37 from 0.42.

Application and rate information is derived from the Weekly Mortgage Application Survey which MBA has conducted since 1990.  Respondents include mortgage bankers, commercial banks, and thrifts.  Rates are based on mortgages with a loan-to-value ratio of 80 percent and points include the application fee.  Base period and value for all indexes is March 16, 1990=100.