Mortgage applications increased 15.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 4, 2011.

Image by H. ARMSTRONG ROBERTS/ClassicStock/Corbis

The Market Composite Index, a measure of mortgage loan application volume, increased 15.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16.1 percent compared with the previous week. The previous week did not include a holiday adjustment for Presidents’ Day. The Refinance Index increased 17.2 percent from the previous week and was the highest Refinance Index observed since the week ending January 14, 2011. The seasonally adjusted Purchase Index increased 12.5 percent from one week earlier and was the highest Purchase Index recorded this year. The unadjusted Purchase Index increased 14.3 percent compared with the previous week and was 14.3 percent lower than the same week one year ago.

“Taking into account typical seasonal patterns, purchase applications rose to their highest level of the year last week. On an unadjusted basis, purchase application activity is the highest since last May,” says Michael Fratantoni, MBA’s vice president of research and economics. “An improving job market is beginning to pave the way for an improving housing market. Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications.”

The four week moving average for the seasonally adjusted Market Index is up 2.7 percent. The four week moving average is up 1.2 percent for the seasonally adjusted Purchase Index, while this average is up 3.6 percent for the Refinance Index.

The refinance share of mortgage activity increased to 65.5 percent of total applications from 64.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.0 percent from 5.5 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.93 percent from 4.84 percent, with points decreasing to 0.87 from 1.29 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.17 percent, with points increasing to 1.15 from 1.07 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please contact MBA Research at (202) 557-2830 or MBAResearch@MortgageBankers.org or click here.

The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.