Mortgage applications rose 15.5% last week as refinancing activity surged, according to a leading trade association. The Mortgage Bankers Association said its market composite index on a seasonally adjusted basis for the week ended July 15 climbed 15.5% from the prior week, which included the July 4 holiday. The index rose 44% on an unadjusted basis. The MBA said the refinance index increased 23.1% last week. Refinancings accounted for 70.1% of all mortgage applications up from 65.6% the previous week and at the second-highest level of the year, according to the MBA. “Ongoing turmoil in the financial markets primarily due to the sovereign debt crisis in Europe has brought mortgage rates back to their lowest levels of the year,” MBA Vice President of Research and Economics Michael Fratantoni said. He said one factor contributing to higher level of refinancings is “borrowers potentially impacted by impending decreases in the conforming loan limit may be opting to lock in fixed-rate financing now.” The MBA said the average interest rate for a 30-year fixed mortgage inched down to 4.54% last week from 4.55% a week prior. The average rate for a 15-year fixed mortgage fell to 3.66% from 3.68%. In four-week moving averages, the market index is up 0.3%, with the purchase index down 0.3% and the refinance index 0.5% higher. Write to Jason Philyaw.

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