Even as mortgage rates rose to their highest level since March, application activity increased from one week earlier, according to the Mortgage Bankers Association.

The MBA's market composite index, a measure of mortgage loan application volume, for the week ending Jan. 12 increased 4.1% on a seasonally adjusted basis from one week earlier.

The survey found that the refinance index increased 4% from the previous week.

The refinance application share decreased to 52.2% from 52.9% the previous week.

The seasonally adjusted purchase index increased 3% from one week earlier. The unadjusted purchase index increased 35% compared with the previous week and was 7% higher than the same week one year ago.

Applications increase

Adjustable-rate loan application activity increased to 5.2% from 5%, while the share of Federal Housing Administration-guaranteed loans increased to 11.7% from 11.1%.

The share of applications for Veterans Affairs-guaranteed loans decreased to 10.7% from 11.4% and the U.S. Department of Agriculture/Rural Development share increased to 0.8% from 0.7%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.33% from 4.23%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased to 4.25% from 4.16%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.3% from 4.16%, while for 15-year fixed-rate mortgages the average increased to 3.77% from 3.66%.

Rates for all three 30-year loans were the highest since last March, while for the 15-year fixed-rate mortgage it was the highest since January 2014.

The average contract interest rate for 5/1 ARMs increased to its highest level since April 2011, 3.62%, from 3.5%.

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