Building on the huge momentum two weeks ago, mortgage application volume jumped further last week, up 14.2 percent on a seasonally adjusted basis, according to the Mortgage Bankers Association (MBA). Total volume is now 41 percent higher than it was one year ago, though still low by historical comparisons. Unlike the previous week, however, this week's jump was driven entirely by refinances.
Applications to refinance increased 22 percent from the previous week, and are now up 63 percent from a year ago. Applications to purchase a home fell 3 percent week-to-week, but are 3 percent higher than the same week one year ago.
"This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week," said Mike Fratantoni, MBA's chief economist.