Homeowners rushed to refinance last week as interest rates continued to decline, the Mortgage Bankers Association reported today.

The market composite index, a measure of total home loan application volume, gained 7.3 percent last week, rising to 671.6 on a seasonally adjusted basis from 626.1 one week earlier.

The index that tracks refinancings climbed 15 percent, boosting the refi share of mortgage activity to 46.1 percent from 43.2 percent the previous week. Loan applications to purchase homes were up 1 percent on a seasonally adjusted basis from the end of February.

Borrowing costs across all loan types dropped last week, with the average rate on 30-year fixed-rate mortgages sinking to 6.04 percent, the 15-year fixed rate falling to 5.73 percent, and the rate on the 1-year ARM down at 5.79 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.27 on the 30-year loans, 1.24 on the 15-year, and 0.8 on one-year ARMs. Statistics are based on loan-to-value ratios of 80 percent.

The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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