Mortgage applications increased 7.2% from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 8, 2016. This week's results included an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 14% compared with the previous week. The Refinance Index increased 11% from the previous week. The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index decreased 20% compared with the previous week and was 5% lower than the same week one year ago. Last year, the Fourth of July fell in the prior week.

The refinance share of mortgage activity increased to 64.0% of total applications from 61.6% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.2% of total applications.

The FHA share of total applications increased to 10.0% from 9.5% the week prior. The VA share of total applications decreased to 12.1% from 12.8% the week prior. The USDA share of total applications remained unchanged at 0.6% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.60 percent, from 3.66%, with points increasing to 0.36 from 0.32 (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 3.61% from 3.67%, with points increasing to 0.32 from 0.24 (including the origination fee) for 80% 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 3.53% from 3.56%, with points increasing to 0.32 from 0.31 (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 2.88% from 2.96%, with points increasing to 0.34 from 0.32 (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 decreased to 2.78% from 2.85%, with points decreasing to 0.25 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.