According to the Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures total mortgage loan application volume, was 39 percent higher in the last two weeks of 2011 than at the end of 2010. But despite the year-over-year improvement, the final two weeks of 2011 saw demand fall 3.7 percent. The Refinance Index was down 1.9 percent and the Purchase Index dropped 9.7 percent. Michael Fratantoni, MBA’s vice president of research and economics, said mortgage activity declined even after adjusting for the typical seasonal slowdown caused by the holidays. Still, Fratantoni said refinance applications reached their highest share of total activity all year during the week ending December 30. Refinance applications accounted for 81.9 percent of total mortgage loan activity. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.07 percent, which was the lowest 30-year rate of 2011. The average 30-year rate for jumbo loans was 4.41 percent. More here.