Home loan application volume gained 2.9 percent last week as interest rates continued to fall, the Mortgage Bankers Association reported today.

Refinancings were up a seasonally adjusted 6.5 percent from the end of April, but that gain was offset by a 0.7 percent decrease in the index for purchase loans. As a result, the refi share of loan applications edged up from 47.1 percent to 48.7 percent and the adjustable-rate mortgage (ARM) share grew from 6.8 percent to 8.3 percent.

Home loan application volume gained 2.9 percent last week as interest rates continued to fall, the Mortgage Bankers Association reported today.

Refinancings were up a seasonally adjusted 6.5 percent from the end of April, but that gain was offset by a 0.7 percent decrease in the index for purchase loans. As a result, the refi share of loan applications edged up from 47.1 percent to 48.7 percent and the adjustable-rate mortgage (ARM) share grew from 6.8 percent to 8.3 percent.

Interest rates across all loan types dipped for the second straight week, MBA reported, with average rates on 30-year fixed-rate mortgages sinking from 5.91 percent to 5.82 percent, rates on 15-year fixed loans slipping from 5.49 percent to 5.38 percent, and rates on one-year ARMs falling from 6.77 percent to 6.6 percent.

The points (loan fees expressed as a percent of the loan amount) that borrowers paid to attain these rates were mostly higher last week. On 30-year loans, points rose from 1.12 to 1.23; on 15-year loans they gained from 1.07 to 1.09; and they fell from 1.35 to 1.31 on one-year ARMs.

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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