Applications for mortgages grew by 3 percent last week, as demand for refinance loans at low interest rates remained strong.

Purchase loans were essentially flat, but applications for refinance loans were up 3.7 percent for the week ending March 27, the Mortgage Bankers Association said today in releasing its Weekly Applications Survey.

Applications for mortgages grew by 3 percent last week, as demand for refinance loans at low interest rates remained strong.

Purchase-loan applications were essentially flat, but applications for refinance loans were up 3.7 percent for the week ending March 27, the Mortgage Bankers Association said today in releasing its Weekly Applications Survey.

That’s not as dramatic as the 41.5 percent increase in refinancing applications seen during the week ending March 20, following the Federal Reserve’s announcement that it would expand its balance sheet by $1.15 trillion to keep interest rates down and stimulate borrowing (see story).

But not only has the increased level of refinance applications been sustained, it increased again last week, demonstrating the continued strength of demand. The Refinance Index, a measure of application volume, was up 141 percent from a year ago. Applications for refinancings made up 79.1 percent of all mortgage applications, compared with 53.4 percent a year ago.

Applications for purchase loans were up 0.1 percent, the MBA said, with applications for conventional purchase loans picking up by 1 percent but applications for government purchase loans (largely FHA) down 1.4 percent. The Purchase Index, a measure of application volume, was down 32 percent from a year ago.

For borrowers making 20 percent down payments, the average contract interest rate for 30-year fixed-rate mortgages was 4.61 percent, down from 4.63 percent the previous week, with points decreasing to 1.03 from 1.13 (including the origination fee). The rate is a new record low for the survey, which dates to 1990.

The average contract interest rate for 15-year fixed-rate mortgages was 4.45 percent, down from from 4.48 percent the previous week, with points decreasing to 1.04 from 1.07 (including the origination fee) for 80 percent loan-to-value loans.

The average contract interest rate for one-year adjustable-rate mortgage (ARM) loans was 6.2 percent, down from 6.22 percent the previous week, with points decreasing to 0.14 from 0.15 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages was 4.45 percent, down from 4.48 percent the previous week, with points decreasing to 1.04 from 1.07 (including the origination fee) for 80 percent LTV loans.

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