Mortgage applications make sharp gains

Mortgage applications jumped sharply last week on increases in refinancing and purchases, another sign of the housing market's continued healing. 

Those applying for loans increased 11.7 percent for the week ended Jan. 4, the Mortgage Bankers Association (MBA) reported on Wednesday. 

The results include an adjustment to account for the New Year’s holiday.

Refinancing was up 12 percent, while purchases increased by 10 percent. 

The refinance share of mortgage activity was unchanged at 82 percent of total applications while the Home Affordable Refinance Program (HARP) share of refinance applications decreased to 25 percent from 27.

Applications have been boosted by record-low interest rates on mortgages, although they did increase slightly last week.

The average contract interest rate for 30-year fixed-rate mortgages with loan balances of $417,500 or less increased to 3.61 percent from 3.52, its highest level since the first week of November.

The rate for 30-year loans with balances greater than $417,500 increased to 3.78 percent from 3.75.

For Federal Housing Administration (FHA) mortgages, the rates on a 30-year loan ticked up to 3.35 percent from 3.34. 

The rate for 15-year fixed-rate mortgages also increased slightly, to 2.88 percent from 2.86.