When mortgage rates dropped last week to their lowest levels in two months, buyers pounced.
After three weeks of mortgage applications falling, a Mortgage Bankers Association index tracking them surged 8.6 percent.
The group’s refinancing index jumped even more, rising 10 percent from the previous week, though it was still 23 percent lower than it was a year ago.
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“MBA expects the purchase market to remain strong, with the recovering job market and supportive demographics fueling housing demand in the months ahead” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
Refinances made up 60 percent of all applications, up slightly from 59.2 percent the previous week. The average refinancing loan size was $279,500, a weekly increase from $269,800.
Kan noted that low mortgage rates prompted a “small resurgence in refinance activity after six weeks of declines.”
The average purchase loan was $406,100, a 1.8 percent increase from last week’s $399,000.
The average contract interest rate for 30-year fixed-rate mortgages fell to 3.20 percent from 3.27 percent. Jumbo loans ticked down to 3.34 percent from 3.35.
MBA’s survey covers 75 percent of the residential mortgage market and has been conducted weekly since 1990.