Mortgage application volume contracted by 2.9 percent from the week before, even while refinance volume continued to soar amid signs that more homeowners are seeking to take advantage of the Home Affordable Refinance Program (HARP).[IMAGE]
The ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA) found in a weekly survey that mortgage loan application volume simultaneously went up 9 percent on a seasonally unadjusted basis.
The trade group's Purchase Index climbed by 17.1 percent but remains 4.3 percent lower than figures seen during the same week last year.
The four-week moving average leapt forward by 4.11 percent for the Market Index and 2.48 percent for the Purchase Index, both on a seasonally adjusted basis.[COLUMN_BREAK]
""Michael Fratantoni"":http://www.mbaa.org/files/SpeakersBureau/FrantantoniM.pdf, VP of research and economics with the MBA, attributed the overall decline last week in a statement to news that the ""Federal Reserve"":http://www.federalreserve.gov/ plans to maintain interest rates between 0 percent and 0.25 percent until the end of 2014.
""Although total application volume dropped on an adjusted basis relative to last week, refinance volume remains high, with survey participants reporting that the expanded [HARP] contributed to roughly 10 percent of their refinance activity,"" he said.
Refinance share of mortgage activity in the markets fell only modestly, dipping from 81.3 percent from the week before to 80 percent last week. The average for the Refinance Index accordingly went up 4.22 percent.
Connecticut offered the single biggest increase in refinance applications among states by ticking up to 80.1 percent from November. Maine followed with a 30.8-percent increase in home purchase applications, the largest so far in home purchases.
Every state observed an increase in refinance volume in December, compared with 12 states that saw their purchase activity fall back during the same time frame.
As a share of mortgage activity, adjustable-rate mortgages (ARMs) declined to 80 percent of application volume, down from 81.3 percent from the week before. For overall activity, ARMs climbed to 5.6 percent last week from 5.3 percent the week before.