Despite a drop in home purchases, last week’s jump in refinancing applications pushed overall volume higher, the Mortgage Bankers Association reported today.

The market composite index, a measure of mortgage application volume, edged up 0.9 percent on a seasonally adjusted basis from the week before. The index that tracks refinancings rose 4.9 percent from the first week of July, while the purchase index fell 1.6 percent.

As a result, the refinance share of mortgage activity increased to 37.7 percent of applications from 36.2 percent the previous week, and the adjustable-rate mortgage (ARM) share rose from 20.4 percent to 21 percent.

Borrowing costs were mostly lower last week, as the average contract interest rate on 30-year fixed-rate mortgages fell to 6.61 percent from 6.65 percent, the rate on 15-year fixed-rate loans dipped to 6.29 percent from 6.31 percent, and the one-year ARM held at 5.6 percent.

Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.6 on the 30-year loans, 1.33 on the 15-year, and 1.11 on one-year ARMs. These points include the origination fee and 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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