Mortgage applications up on lower rates, increased refinancing

Mortgage applications increased 7.8 percent last week, boosted by a double-digit rise in refinancings as home-loan rates dropped to their lowest level in seven months. 

Refinancing applications increased 13.2 percent, the highest level since the week that ended Dec. 10, while the purchase index fell 3.2 percent from the previous week, according to data from the Mortgage Bankers Association for the week ending May 13.

"The 30-year fixed mortgage rate is now 53 basis points below its 2011 peak, and has decreased for five straight weeks," said Michael Fratantoni, MBA's vice president of research. "Over this five-week span, the refinance index has increased by about 33 percent. Refinance application volumes remain about 50 percent below the most recent peak last October. "

The four-week moving average, which is a less volatile measure than the weekly figures, is up 7.2 percent for the refinance index and down 2.9 percent for the purchase index.

The refinance share of mortgage activity increased to 66.7 percent of total applications from 63.1 percent the previous week, the largest refinance share since late January. 

The average interest rate for 30-year fixed-rate mortgages decreased to 4.60 percent from 4.67 percent, the lowest rate since November. 

The rate for 15-year fixed-rate mortgages decreased to 3.75 percent from 3.81 percent, also the lowest rate since early November 2010.