Mortgage applications increased 14.2% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending January 16, 2015.

This comes a week after an incredible 49% surge.

The Market Composite Index, a measure of mortgage loan application volume, increased 14.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 17% compared with the previous week. The Refinance Index increased 22% from the previous week. The seasonally adjusted Purchase Index decreased 3% from one week earlier. The unadjusted Purchase Index increased 3% compared with the previous week and was 3% higher than the same week one year ago.

“Mortgage application volume increased last week to its highest level since June 2013, led by a 22% increase in refinance application volume. This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57% last week. Even with this increase, refinances made up only 48% of FHA volume, compared to 73% for VA, and 77% for conventional loans,” said Mike Fratantoni, MBA’s Chief Economist.

“Conventional purchase applications were down about 3% for the week on a seasonally adjusted basis, but up 5% relative to last year at this time. FHA purchase applications were down 1% for the week on a seasonally adjusted basis.”

MBA now provides additional data regarding the composition and level of application activity for government loan programs, including breakouts for FHA, VA, and USDA loans. Historical data for these new series are available to subscribers.

Conventional refinance applications increased 21% relative to the previous week, while government refinances increased 29%. The increase in government refinances was driven by a 57% surge in applications for FHA loans, which also boosted the FHA share of refinance applications to 5.2% from 4.1% the prior week.

The refinance share of mortgage activity increased to 74% of total applications, the highest level since May 2013, from 71% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4% of total applications.

The FHA share of total applications increased to 8.0% this week from 7.5% last week. The VA share of total applications decreased to 9.4% this week from 9.7% last week. The USDA share of total applications decreased to 0.6% from 0.8% last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.80%, the lowest level since May 2013, from 3.89%, with points increasing to 0.29 from 0.23 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.86%, the lowest level since May 2013, from 3.88%, with points remaining unchanged at 0.23 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.66%, the lowest level since May 2013, from 3.71%, with points increasing to 0.15 from -0.05 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.10%, the lowest level since May 2013, from 3.16%, with points decreasing to 0.29 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.87%, the lowest level since June 2013, from 2.94%, with points decreasing to 0.41 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.