Refinancing Spurs Mortgage Application Demand

Washington, DC, Jan. 18, 2012 -- Mortgage applications surged more than 20% last week, fueled by increased refinancing on lower interest rates, according to the Mortgage Bankers Association.

MBA said applications jumped 23.1% in the week ended January 13.

The MBA's seasonally adjusted index of refinancing applications climbed 26.4%, while the gauge of loan requests for home purchases rose 10.3%.

"With mortgage rates reaching new lows, refinance volume jumped," Michael Fratantoni, MBA's vice president of research and economics, said in a press release.

"Purchase activity also increased as buyers returned to the market after the holiday season."

The refinance share of total mortgage activity rose to 82.2% of applications from 80.8% the previous week, making it the highest refinance share since October 2010.

Fixed 30-year mortgage rates averaged 4.06%, down 5 basis points from 4.11%.