Borrowers jumping on a dip in rates in order to refinance existing mortgages helped push loan applications up 5.1 percent for the week ending Oct. 10, even though applications for purchase mortgages were flat, the Mortgage Bankers Association said today.

The MBA’s Weekly Mortgage Applications Survey showed applications for refinance loans were up 12.5 percent from the previous week, while applications for conventional purchase loans fell 0.3 percent. The survey’s indexes, which are seasonally adjusted, showed applications for government purchase loans, largely FHA, down 2.1 percent from the previous week.

MBA economic forecaster Orawin Velz noted that Treasury yields were "extremely volatile." Lower yields earlier in the week appeared to have "spurred refinance activity, which then faded as the week went on and rates began to rise," Velz said.

The refinance share of mortgage activity increased to 46.4 percent of total applications from 43.4 percent the previous week, the MBA said. The adjustable-rate mortgage (ARM) share of activity increased to 2.6 percent from 2.3 percent.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.47 percent from 5.99 percent, with points including the origination fee increasing to 1.14 from 1.09 for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.17 percent from 5.71 percent, with points increasing to 1.18 from 1.16 for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 6.67 percent from 6.6 percent, with points increasing to 0.43 from 0.37 for 80 percent LTV loans.

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