Mortgage Application Drop in the U.S.

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Mortgage applications in the U.S. dropped last week, after increasing for three consecutive weeks, according to a new report from the Mortgage Bankers Association. 

Applications for the week ending January 24 decreased 0.2 percent on a seasonally adjusted basis from one week prior. The results for last week included an adjustment for the Martin Luther King, Jr. holiday. 

The refinance index decreased two percent from the previous week. The refinance share now accounts for 62 percent of total applications, down from the 64 percent report the previous week. It is at its lowest level since September 2013, the MBA reports. 

The adjustable-rate mortgage share of activity remained the same at seven percent of total applications. The seasonally adjusted purchase index increased two percent from one week earlier.

Earlier this year, the association lowered the mortgage origination forecast by $57 billion to $1.12 trillion for this year, citing declining application activity and higher interest rates.

More from today's report: 

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.52 percent, the lowest rate since the week ending November 29, 2013, from 4.57 percent, with points increasing to 0.40 from  0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.47 percent, the lowest rate since the week ending November 15, 2013, from 4.57 percent, with points increasing to 0.27 from 0.18 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.18 percent, the lowest rate since the week ending November 29, 2013, from 4.24 percent, with points increasing to 0.33 from 0.23 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

• The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.59 percent, the lowest rate since the week ending November 29, 2013, from 3.68 percent, with points decreasing to 0.26 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

• The average contract interest rate for 5/1 ARMs increased to 3.25 percent from 3.23 percent, with points decreasing to 0.33 from 0.37 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.