Although purchase applications declined further, total mortgage loan application volume jumped 11.3 percent[IMAGE]
for the week ending May 21, 2010, due to a continued increase in refinance applications, the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA) reported Wednesday.
According to MBA's Weekly Mortgage Applications Survey, the purchase index fell 3.3 percent from one week earlier, falling to the lowest level observed in the survey since April 1997. But the decline in purchase applications was trumped by a significant week-to-week increase in refinance applications.[COLUMN_BREAK]
Marking the third consecutive week of increases, the refinance index surged 17 percent from the previous week to the highest refinance index recorded in the survey since October 2009. The sustained growth in refinance applications pushed the refinance share of mortgage activity to 72.2 percent of total applications, up from 68.1 percent the previous week. This, MBA said, is the largest refinance share observed in the survey since December 2009.
""Refinance application volume jumped last week as continuing financial market turmoil related to the budget crises in Europe extended the opportunity for homeowners to lock in at historically low mortgage rates,"" said Michael Fratantoni, MBA's VP of research and economics.
While the continuous surge in refinance applications has been undoubtedly strengthened by extremely low mortgage rates, MBAÃ¢â‚¬â„¢s weekly rate report was mixed.
From one week to the next, the average contract interest rate for 30-year fixed-rate mortgages nudged down from 4.83 percent to 4.8 percent Ã¢â‚¬" the lowest rate recorded in the survey since the week ending November 27, 2009, MBA said. However, the association said the average rate for 15-year fixed-rate mortgages inched up to 4.25 percent from 4.19 percent.