Overall mortgage purchases climbed 17.1 percent last week on a seasonally adjusted basis, as substantially lower interest rates reeled in home buyers and refinancers, according to the Mortgage Bankers Association’s weekly survey.

The MBA seasonally adjusted purchase index increased by 11.1 percent to 445.9 from 401.3 the previous week. The seasonally adjusted refinance index increased by 25.1 percent to 2,195.7 from 1,755.4 one week earlier.

The refinance share of mortgage activity increased to 51.6 percent of total applications, from 49.7 percent the previous week. The adjustable-rate-mortgage share of activity decreased to 26.6 percent from 30.3 percent the previous week.

“Of interest is that overall applications for the first full week of the new year were up by more than 11 percent from the last full week before Christmas (week ending 12/19/03), with the purchase market up 8 percent and the refinance market up 15 percent,” said Michael Cevarr, MBA’s manager of member surveys.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.56 percent from 5.81 percent one week earlier. Points including the origination fee decreased to 1.38 from 1.43 the previous week for 80 percent loan-to-value ratio loans.

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