Mortgage applications increased 11.6% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending October 17, 2014.

This week’s results did not include an adjustment for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12% compared with the previous week. The Refinance Index increased 23% from the previous week to the highest level since November 2013. The seasonally adjusted Purchase Index decreased 5% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 9% lower than the same week one year ago.

“Continuing concerns about weak economic growth in Europe and a few US economic indicators that came in below expectations caused a flight to quality into US Treasuries last week, leading to sharp drops in interest rates,” said Mike Fratantoni, MBA’s Chief Economist. “Mortgage rates have fallen close to 30 basis points over the last four weeks. Refinance application volume reached the highest level since November 2013 as a result, and the average loan balance for refinance applications increased to $306,400, the highest level in the survey’s history.”

The refinance share of mortgage activity increased to 65% of total applications, the highest level since December 2013, from 59% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.4% of total applications, the highest level since June 2008.

The FHA share of total applications decreased from 9.5% last week to 8.3% this week. The VA share of total applications increased from 8.8% last week to 9.6% this week. The USDA share of total applications fell from 1.0% last week to 0.8% this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.10%, the lowest level since May 2013, from 4.20%, with points increasing to 0.21 from 0.17 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.03%, the lowest level since May 2013, from 4.14%, with points increasing to 0.20 from 0.10 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81%, the lowest level since June 2013, from 3.90%, with points decreasing to 0.07 from 0.08 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.28%, the lowest level since May 2013, from 3.41%, with points decreasing to 0.22 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.94%, the lowest level since June 2013, from 3.05%, with points decreasing to 0.37 from 0.38 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.