Fixed-rate mortgage rates hit all-time lows, spurring an increase in mortgage refinance loan application volume and as a result overall mortgage application volume increased 7.5% on a seasonally adjusted basis for the week ended Feb. 3, according to the Mortgage Bankers Association.
The Refinance Index increased by 9.4% from the previous week, although the market share of refi applications increased only slightly to 80.5% from 80%.
But the low rates had little effect on the home purchase market as application volume for these loans increased by a mere 0.1% on a seasonally adjusted basis from last week. The Purchase Index was down 4.1% on an unadjusted basis from the same week in 2011.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) declined by four basis points to 4.09%, while the average contract interest rate for 30-year Federal Housing Administration-insured loans fell seven basis points to 3.89%.
The rates for 30-year FRMs with jumbo loan balances declined by four basis points to 4.29%. The average contract interest rate for 15-year FRMs declined three basis points to 3.33%.