Mortgage Applications Pick Up Following Thanksgiving

Mortgage applications recovered slightly during the first week of December, the ""Mortgage Bankers Association"":http://mba.org/default.htm (MBA) reported.

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MBA's Weekly Mortgage Applications Survey showed a 1.0 percent increase in loan application volume (seasonally adjusted) for the week ending December 6.

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The previous survey's results had included an adjustment for the Thanksgiving holiday. Unadjusted, the index increased 43 percent.

Examining loan type, MBA's Refinance Index increased 2 percent week-over-week, though it was 16 percent down compared to the week prior to Thanksgiving. The refinance share of total mortgage activity increased 2 percentage points to 65 percent.

On the purchase side, applications increased 1 percent on a seasonally adjusted basis, ending the week 3 percent lower than the week before Thanksgiving. The unadjusted Purchase Index increased 37 percent on a weekly basis and was 10 percent lower than the same week last year.

Also notable was last week's increase in adjustable-rate mortgage loans, which grew to represent 8.1 percent of all activity--the highest level since July 2008.

As applications rose, so did mortgage rates. MBA's average contract interest rate for a 30-year fixed rate mortgage was 4.61 percent, up from 4.51 percent and the highest rate since September. Points, meanwhile, decreased to 0.26 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio loans.