Application volume fell 8.2 percent, seasonally-adjusted, according to data released Wednesday morning by the Mortgage Bankers Association; yet, it appears that while the number of total applications fell, the number of households looking to obtain a loan actually increased. The MBA's weekly application index found a 12.3 percent drop in refinancing application activity, while purchase apps increased 7.3 percent; all figures are adjusted for the holiday-shortened New Year's week. Yet, while composite application index totals fell at the MBA, the MAX index -- which tracks the number of households applying for a mortgage, rather than the number of applications -- found a 5 percent weekly rise in household applications, seasonally-adjusted. Much of the increase in household applications came outside of California, as well, according to New York-based Mortgage Maxx, LLC, which publishes the MAX data and provides prepayment estimates to numerous secondary mortgage market participants. A California MAX index found a 4.5 percent drop in applications within the Golden State for the week ended Jan. 2. Lenders have been faced with a veritable refinancing boom in recent weeks, leading the MBA's app index to soar as borrowers flooded the market with applications. The picture being painted by the data this week suggests that refi activity likely remained strong, although borrowers looking to refinance (or purchase) submitted fewer applications per household in their effort to obtain a new loan. The MBA reported that interest in both conventional and government loans remained strong last week, up 2.3 percent and 19.2 percent, respectively. Refinance share of overall applications fell from 82.9 percent to 79.8 percent of all applications received by reporting lenders, according to the Washington-based industry group. The question, of course, is how long lenders will see this surge in borrower interest; relatedly, it's questionable if even strong household demand for a mortgage translates into funded mortgages, given tighter underwriting standards. Brokers informed HousingWire Tuesday, however, that they were locking loans at 4.5 percent -- a level that seems likely to drive further increases in application activity for at least the next few weeks, if rates remain at that level. "The success of initial apps to new loans has been disintegrating all during the past year," said MAX publisher Paul Descloux. "Though the MAX is correctly measuring initial demand, the ultimate outcome for successful new mortgage originations may in fact be much lower." He suggested that agency CPRs -- CPRs measure prepayment rates and are fundamental to secondary mortgage market participants in buying and selling bonds -- could easily double from current levels, yet "still be considered historically tame." For more information, visit http://www.mortgagebankers.org and http://www.mortgagemaxx.us. Write to Paul Jackson at paul.jackson@housingwire.com.