NEW YORK — Mortgage applications increased 9.2% in the the week ended May 11, on strong refinance activity, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
The refinance index increased 13.0%, and the seasonally adjusted purchase index decreased 2.4%.
The market index seasonally adjusted four-week moving average grew 1.77%. The purchase index seasonally adjusted four-week moving average rose 1.57%, and this average is up 1.88% for the refinance index.
Refinances were 74.9% of market share, up from 72.1% a week earlier, while adjustable-rate mortgages slipped to 5.4% of volume from 5.7%.
“A flare up of the sovereign debt troubles in Europe once again led investors to flee to the safety of US Treasury securities last week. As a result, mortgage rates have reached new lows in our survey, and refinancing application volumes picked up substantially as a result,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Survey participants indicated that this was not due primarily to HARP volume – the HARP share of refinances fell to 28 percent of refinance applications, down relative to last week and last month, when the share was just above 30 percent in April. The increase in refinance activity last week was concentrated in the conventional sector, which was up around 14 percent for the week, while government refinance applications were up only 4 percent.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.96%, the lowest rate in the history of the survey, from 4.01%.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.26%, the lowest rate in the history of the survey, from 3.29%.