Mortgage applications continued to increase over the last week even as interest rates rose to the highest level in nearly a year, according to the latest data from the Mortgage Bankers Association.
The latest Weekly Mortgage Applications Survey from the MBA, which covers the week ending Jan. 19, 2018, shows that mortgage applications increased 4.5% from last week.
This week’s report includes an adjustment for the Martin Luther King Jr Day holiday.
According to the MBA report, the Market Composite Index, a measure of mortgage loan application volume, rose by 4.5% on a seasonally adjusted basis from one week earlier.
On an unadjusted basis, the Index declined 4% compared with the previous week.
The report also showed that the Refinance Index rose by 1% from the previous week, while the seasonally adjusted Purchase Index increased 6% to its highest level since April 2010.
The unadjusted Purchase Index increased 2% when compared with the previous week and was 7% higher than the same week last year.
Applications rose despite interest rates increasing to the highest level since last spring.
According to the MBA report, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) rose from 4.33% to 4.36%, the highest that figure has been since March 2017.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) also rose to the highest level since March 2017, climbing from 4.25% to 4.31%.
Interest rates on Federal Housing Administration loans rose as well, actually reaching a more than four-year high.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased from 4.3% to 4.37%, the highest that figure has been since September 2013.
The interest rates for 15-year mortgages also rose to the highest level since September 2013, rising from 3.77% to 3.81%.
The average contract interest rate for 5/1 adjustable-rate mortgages also increased from 3.62% to 3.7%, reaching its highest level since April 2011.
The refinance share of mortgage activity fell to 49.4% of total applications from 52.2% last week. The ARM share of activity remained at 5.2% of total applications.
The FHA share of total applications declined from 11.7% to 11.4%, while the Department of Veterans Affairs share of total applications increased to 10.9% from 10.7%. The Department of Agriculture share of total applications remained at 0.8% from the week prior.