The refinance share of mortgage activity increased to 74.9 percent of total applications from 72.1 percent the previous week.
Two senators have introduced a measure that would knock down hurdles to refinancing for homeowners with loans held by Fannie Mae and Freddie Mac. The bill is gaining support but has not been scheduled for a markup.
"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.
The survey showed that the refinancing increase was not due primarily to the Home Affordable Refinance Program (HARP), as the share of the program's 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, Fratantoni said.
In April, the investor share of applications for home purchase was at 5.7 percent, unchanged from March.
The Pacific region has the largest investor share of applications, at 9.5 percent. In addition, the share of purchase mortgages for second homes decreased to 5.7 percent in April from 5.8 percent in March.
Nearly all types of loans hit all-time lows last week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances — $417,500 or less — decreased to 3.96 percent from 4.01, the lowest rate in the history of the survey.
The rate for 30-year fixed-rate mortgages with jumbo loan balances — greater than $417,500 — also hit an all-time low, down to 4.20 percent from 4.29.
For 30-year fixed mortgages backed by the Federal Housing Administration, rates decreased to 3.75 percent from 3.81, another record low.
The 15-year fixed rate also hit an historic low, falling to 3.26 percent from 3.29.