Mortgage Applications on the Rise Again

The number of mortgage applications submitted to lenders increased last week, as new applications for both loan refinancings and home purchases rose. That follows a 13 percent plunge in overall activity the week before.
[IMAGE] Data released by the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) Wednesday shows that the trade group's measurement of total mortgage loan application volume jumped 11.3 percent for the week ending January 28, when compared to the previous week.

MBA's refinance index increased 11.7 percent from one week earlier. The refinance share of mortgage activity decreased to 69.3 percent of total applications, compared to 70.3 percent of total activity the prior week.

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MBA says this is the lowest refinance share observed in the survey since the week ending May 14, 2010. Analysts and industry experts have warned that the refinance market is likely to take a big hit going forward as mortgage interest rates are expected to head higher.

New mortgage applications for the purchase of a home also rose last week. MBA's purchase index was up 9.5 percent from one week earlier.

""Applications increased this week relative to the holiday week,"" said Michael Fratantoni, MBA's VP of research and economics, referring to the Martin Luther King holiday the week prior.

Putting the recent mortgage data into perspective, Fratantoni went on to explain, ""Looking over the past two weeks, purchase applications are flat, and refinance applications are down about five percent.""

MBA reported that the average contract interest rate for 30-year fixed mortgages increased to 4.81 percent last week, up from 4.80 percent.

Rates on 15-year loans also edged up. MBA's survey shows that the average contract interest rate for a 15-year fixed mortgage increased to 4.13 percent from 4.12 percent.