Mortgage loan applications increased 7.6% in the week ending July 16, as refinancings surged 8.6% on a decline in interest rates, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

“As rates on 30- and 15-year fixed-rate mortgages declined to the lowest levels recorded in the survey, refinance activity increased last week,” said Michael Fratantoni, MBA’s vice president of research and economics. “The refinance index is up almost 30% over the past four weeks, but is still well below the peak seen last spring.”

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.59% from 4.69%, while a 15-year fixed-rate mortgages decreased to 4.05% from 4.12%.

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