A rebound in mortgage refinancing activity this month should be an influence in February and March prepayments (which are reported in March and April, respectively), though the day count will be the primary driver.

The Mortgage Bankers Association reported today that both refinance and purchase activity rose in the week ending Jan. 11 as mortgage rates held near recent higher levels.

The Refi Index jumped 15.3% to 4564, following a 12.1% gain in the first week of January. At this point, the index has more than recovered the slowing that occurred in the last two weeks of December that was associated with the year-end holidays.

As a percent of total applications, refinance share was unchanged at 82%.

Prepayments are projected to be close to unchanged in January, as an increase in the day count partially offsets the decline in refinancings in December.

At this time, speeds on 30-year Fannies are expected to decline close to 10%, on average, in February. A major influence is a two-day decline in the day count to 19. March speeds are projected to increase about 5%, as the number of collection days rises to 20.

Meanwhile, the MBA’s Purchase Index increased 12.9% to 209.6 for the week ended Jan. 11, leaving it at its highest level since April 2011.

Mortgage application activity overall was up 15.2% from the prior week.

The contract interest rate for 30-year fixed rate conforming mortgage loans averaged 3.61%, unchanged from the prior week, while interest rates on Federal Housing Administration mortgages increased by four basis points to 3.39%.

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