Mortgage application volume started the year on the upswing because of higher refinance activity, even with a slight increase in rates.

The Mortgage Bankers Association's Weekly Mortgage Applications Survey was up 8.3% for the week ending Jan. 5. The refinance index increased 11% from the previous week. This week's results included an adjustment for the New Year's holiday. The results for the previous week ending Dec. 29 were revised.

The refinance application share increased to 52.9% from 52.1% the previous week.

Mortgage application volume increases

The seasonally adjusted purchase index increased 5% from one week earlier. The unadjusted purchase index increased 44% compared with the previous week and was 1% lower than the same week one year ago.

Adjustable-rate loan application activity decreased to 5% from 5.3% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 11.1% from 10.8% the week prior.

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

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 1 basis point to 4.23%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 2 basis points to 4.16%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 1 basis point to 4.16%, while for 15-year fixed-rate mortgages the average increased 2 basis points to 3.66%. The average contract interest rate for 5/1 ARMs decreased 3 basis points to 3.5%.

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