Refinances Push Up Application Volume

Mortgage applications increased for the third straight week in mid-January, continuing a trend that started with the opening of the new year.

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According to the ""Mortgage Bankers Association's"":http://mba.org/default.htm (MBA) Weekly Mortgage Applications Survey, loan application volume rose 4.7 percent (seasonally adjusted) for the week [COLUMN_BREAK]

ending January 17. On an unadjusted basis, application volume was up 7 percent from the previous week.

The overall increase came entirely from a continued recovery in refinance numbers. The survey's Refinance Index was up 10 percent week-over-week, with refinance share accounting for 64 percent of total applications, the highest level in a month.

Meanwhile, the seasonally adjusted Purchase Index dropped 4 percent compared to the prior week. Unadjusted, the Purchase Index rose 2 percent but fell 15 percent short year-over-year.

Despite the recent upward trend, weak application numbers in the last few months have analysts anticipating a slower year for originations. MBA brought down its 2014 estimates in its ""latest forecast"":https://themreport.com/articles/mba-dials-back-2014-origination-forecasts-2014-01-14, pointing to declining applications and rising interest rates.

The applications survey for last week shows the average 30-year fixed interest rate falling to 4.57 percent--the lowest level since November--with points increasing to 0.36 for 80 percent loan-to-value ratio loans.