Mortgage applications increased 0.9% in the week ended July 20, as refinances continue to spark activity, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The refinance index grew 2% its highest level since April 19, 2009. The seasonally adjusted purchase index decreased 3% in the week.

Refinances accounted for 81% of volume, up from 80% the week before, while adjustable-rate mortgages' share of activity was 4% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained at a record low 3.74%.

The average contract interest rate for 15-year fixed-rate mortgages decreased to a record low 3.07% from 3.12% a week earlier.

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