This week mortgage rates decreased compared to the previous week, reaching their lowest point in over a month. Mortgage applications, on the other hand, experienced a huge decrease on the first day of the year and an equally impressive increase one week ago.

30-year fixed-rate mortgages decreased to 3.92% this week compared to 3.97% a week earlier, according to Freddie Mac. The last time the average 30-year rates were below the current level was on November 5, 2015, when rates averaged 3.87%.

15-year fixed-rate mortgages dropped from 3.26% last week to 3.19% this week, which is the lowest 15-year rate since December 3, 2015 when it averaged 3.16%.

5/1-year adjustable-rate mortgages decreased from 3.09% one week ago to 3.01% this week. The last time we experienced lower rates was during the first week of December, when 5/1-year mortgages averaged 2.99%.

2016 has begun with ups and downs when taking into account the drastic changes in mortgage applications that have occurred in the past two weeks.

This year began with a huge drop in mortgage applications, which decreased 27% on the week ending January 1, 2016 compared to the previous week, according to the MBA Weekly Mortgage Applications Survey.

Last week, however, mortgage applications skyrocketed, rising 21.3%, with an important increase in mortgage applications on the week ending January 8, 2016 compared to a week earlier.

This increase in mortgage applications has also increased the refinance share of mortgage applications and the adjustable-rate mortgage share of activity. The refinance share of mortgage activity rose to 55.8% of all applications last week, as opposed to 55.4% the previous week; and the adjustable-rate mortgage share of activity increased from 4.7% of total applications two weeks ago to 5.1% last week.

This increase in the USDA share of applications was also noticeable, rising from 0.6% two weeks ago to 0.8% last week. Meanwhile, the FHA and VA share of all applications dropped, with the FHA decreasing to 14.4% compared to 14.6% the previous week, and the VA dropping to 12.2% of total applications last week compared to 12.9% a week earlier.

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