The refinance share of mortgage activity remained unchanged from the previous week at 62% of total applications, while the adjustable-rate mortgage share increased to 8% of overall loan applications.
All loan products saw their average contract rates decline, with rates at their lowest level since last November. However, the previous lows for 5/1 ARMs was December 2013.
"January was great for bond prices and mortgage-backed securities, and thus we saw mortgage rates continue to drop at the close of the month," says Bill Banfield, vice president at Quicken Loans in a statement.
"Believe it or not, there are still millions of folks out there who could benefit from refinancing, and the uptick in refinance volume from lower rates shows us that."
The average contract interest rate for 30-year fixed-rate mortgages fell five basis points to 4.47%. This rate is for conforming loan balances of $417,000 or less. Furthermore, points decreased to 0.25 from 0.40 (including the origination fee) for 80% loan-to-value ratio loans.
Meanwhile, 15-year fixed-rate mortgages saw its rate drop to 3.53% from 3.59%. Also, points were up to 0.28 from 0.26 for 80% LTV loans.
For Federal Housing Administration-insured loans, 30-year interest rates were down six basis points to 4.12%.
Additionally, 30-year jumbo loan balances decreased to 4.42%, with points decreasing to 0.11 from 0.27 for 80% LTV loans.