Refis Drive Mortgage App Activity as Rates Drop: MBA

There was a slight increase in application activity driven by consumers taking advantage of a downturn in mortgage rates to refinance.

Loan application volume increased 0.8% on a seasonally adjusted basis for the week ended Jan. 13 over the previous week, as refinance activity increased by 7% during the period, according to the Mortgage Bankers Association.

The results for the week of Jan. 6 were adjusted for New Year's Day.

On an unadjusted basis, total application volume was up 29% over the prior week. The share of refi apps increased to 53% from 51.2% during the same period.

Seasonally adjusted purchase application volume was down 5%, but up 25% on an unadjusted basis from the prior week. Compared to the same week in 2015, purchase applications were down 1% on an unadjusted basis.

The share of Federal Housing Administration applications increased to 13.1% from 11.7% the prior week, while Veterans Administration program app volume fell to 12.1% from 12.8%. U.S. Department of Agriculture loan apps remained at 0.9%.

While interest rates increased in the period following the presidential election, in the last few weeks they have declined as the stock market has paused in its run-up and 10-year Treasury yields fell from their peak.

The average rate for the 30-year fixed-rate conforming mortgage, those with balances of $424,000 or less, fell five basis points to 4.27%, while jumbo mortgage rates also fell five basis points to 4.22%.

The 15-year FRM had a 5-basis-point rate drop to 3.51%.

FHA mortgages with an 80% loan-to-value ratio saw a 2-basis-point increase in the average rate to 4.1%. The 5/1 adjustable had an increase in the average rate of 12 basis points to 3.44%.