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Mortgage Applications Surge 13.6 Percent as Interest Rates Fall

After declining for two consecutive weeks, mortgage application volume has bounced back.

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According to the ""Weekly Mortgage Applications Survey"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/72597.htm released Wednesday by the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA), mortgage applications soared 13.6 percent for the week ending April 16, 2010.

Both refinance and purchase applications increased in the weekly survey. The Refinance Index surged 15.8 percent

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from the previous week, causing the refinance share of mortgage activity to nudge up to 60 percent of total applications. In addition, the Purchase Index jumped 10.1 percent from a week earlier.

""Treasury rates fell last week causing a decline in mortgage rates. As a result, refinance applications picked up over the week, as some borrowers took advantage of this recent rate volatility to lock in a low fixed-rate loan,"" said Michael Fratantoni, MBA's VP of research and economics. ""Purchase applications continued to increase coming out of the Easter holiday, as we approach the end of the homebuyer tax credit, and are up modestly over last month.""

Mortgage application volume was bolstered by a week-to-week drop in interest rates.

According to MBA, the average contract interest rate for 30-year fixed-rate mortgages fell to 5.04 percent from 5.17 percent, with points increasing to 0.98 from 0.91 for 80 percent loan-to-value (LTV) ratio loans. Additionally, the average rate for 15-year fixed-rate mortgages decreased to 4.34 percent from 4.45 percent, with points increasing to 0.98 from 0.8 for 80 percent LTV loans.

About Author: Brittany Dunn

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