The number of mortgage applications grew last week despite the credit crunch currently impacting the lending industry, the Mortgage Bankers Association reported today.

The market composite index, which measures total home loan application volume, was up 3.4 percent last week on a seasonally adjusted basis from the week before. Leading the uptick in activity was the index that tracks loans for new purchases, which rose 3.9 percent during the period, followed by the refinance index, which increased 2.6 percent.

“Recent upheavals in the mortgage industry may be temporarily increasing the level of retail application activity at the large lenders that participate in the MBA survey rather than representing a systemwide increase,” said Doug Duncan, MBA’s chief economist and senior vice president of research and business development, in a statement.

The refinance share of mortgage activity remained unchanged last week at 39.9 percent of total applications, while the adjustable-rate mortgage (ARM) share decreased to 21 percent, according to MBA.

Average interest rates increased last week after a month of declines, according to MBA, with the rate on 30-year fixed-rate mortgages climbing to 6.45 percent from 6.41 percent, the 15-year fixed-rate rising to 6.19 percent from 6.16 percent, and the one-year ARM rate jumping to 5.81 percent from 5.69 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.54 on the 30-year loans, 1.16 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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