Mortgage application volume climbed 6.2% in the week ended Dec. 7, as refinances rose 8% and purchases grew 1%, according to the Mortgage Bankers Association's weekly mortgage applications survey.
"Continued uncertainty due to the lack of resolution regarding the fiscal cliff led interest rates lower last week, with mortgage rates reaching a new low in our survey," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Refinance activity increased, with the refinance index hitting its highest level in two months, and the refinance share reaching its highest level since January 2009. Applications for purchase increased for a fifth consecutive week, and are running almost ten percent above their level at this time last year."
Refinance accounted for 84% of applications, up from 82% the week before. Adjustable-rate mortgages remained 3% of volume, while HARPs rose 29% from 27%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) fell to 3.47%, the lowest rate in the history of the survey, from 3.52%, while the average 15-year fixed-rate mortgage rate dipped to a record low 2.85% from 2.86%.