The lowest 30-year mortgage rates since early May spurred a refinancing wave that pushed total mortgage applications higher last week despite a small drop in demand for loans to buy homes, an industry trade group said on Wednesday.
The Mortgage Bankers Association's mortgage applications index rose by a seasonally adjusted 3.8 percent to 681.7 in the week ended Oct. 26.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, fell to an average of 6.15 percent from 6.21 percent the prior week.
This loan rate was the lowest since 6.13 percent in the May 11 week, helping propel the MBA's refinance index to its highest level since the week of March 9.
The refinancing index jumped 9.2 percent to a seasonally adjusted 2,249.0 last week. Refinancings represented a growing share of total mortgage activity, rising to 49.6 percent from 47 percent the prior week.
Applications to purchase a home, in contrast, declined 0.7 percent last week to a seasonally adjusted 412.9, the MBA said.