Mortgage Applications Up as Rates Fall

Washington, DC, May 11, 2011 -- Mortgage applications increased 8.2% from the previous week, according to the Mortgage Bankers Association’s weekly survey.

The Refinance Index increased 9.0% from the previous week, and is at its highest level since the week ending March 18.

The seasonally adjusted Purchase Index increased 6.7% from one week earlier. The unadjusted Purchase Index increased 7.1% compared with the previous week and was 25.8% lower than the same week one year ago.

“Rates dropped again last week as the Federal Reserve continued its QE2 asset purchase program.   The 30-year fixed mortgage rate is now 46 basis points below its 2011 peak, and has decreased for four straight weeks by a total of 31 basis points,” said Michael Fratantoni, MBA’s vice president of research.

“Over this four week span, the refinance index has increased by about 18 percent. Despite the recent increases however, refinance application volumes remain more than 50% below levels seen last fall.”

The refinance share of mortgage activity increased to 63.1% of total applications from 62.7% the previous week.

The average interest rate for 30-year fixed-rate mortgages decreased to 4.67% from 4.76 percent.

The interest rate for 15-year fixed-rate mortgages decreased to 3.81% from 3.96 percent.