Home loan applications continued higher last week, driven by a strong increase in refinancings, the Mortgage Bankers Association reported today.

The market composite index, which measures total mortgage loan application volume, was up 2.4 percent on a seasonally adjusted basis from the week before, according to MBA. The greatest growth was seen in the index that tracks refinancings, which rose 4.6 percent from a week earlier, followed by a 0.9 percent gain in the purchase loan index.

Interest rates crept higher last week, MBA reported, with the average contract interest rate on 30-year fixed-rate mortgages rising to 6.29 percent from 6.25 percent, the 15-year fixed rate jumping to 5.99 percent from 5.9 percent, and the rate on one-year adjustable-rate mortgages (ARMs) growing to 6.39 percent from 6.34 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.02 on the 30-year loans, 1.09 on the 15-year, and 0.95 on one-year ARMs. These points include the origination fee and are based on loan-to-value ratios of 80 percent.

Refinancings increased their market share last week to 43.5 percent of total applications from 42.1 percent in the first week of September, while the ARM share sank from 13.2 percent to 12.6 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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