Mortgage Activity Rebounds as Rates Drop Again

Industry data released by the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) Wednesday shows that consumer demand for home loans intensified last week as mortgage interest rates dropped to their second-lowest level on record.

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MBA says its measurement of total mortgage loan application volume rose 3.2 percent for the week ending October 22, after ""dipping more than 10 percent"":http://dsnews.comarticles/mortgage-application-volume-dips-10-in-latest-weekly-survey-2010-10-20 the week before.

The trade group's refinance index was up 3.0 percent from the previous week, while the purchase index climbed 3.9 percent. Refinances made up 82.3 percent of total mortgage applications last week.

MBA reported that the average contract interest rate for 30-year fixed-rate mortgages last week dropped to 4.25 percent, down from 4.34 percent the week prior. The 30-year contract rate matches the rate from the week ending October 1, 2010, which was the second lowest ever observed in MBA's survey.

The average contract rate for 15-year fixed-rate mortgages decreased to 3.67 percent from 3.74 percent. The 15-year contract rate also came in as the second lowest observed in the survey, with the lowest being 3.62 percent from two weeks ago.