With interest rates well below 4% for the week ending June 8, total mortgage applications soared 18% from the previous week, an industry trade group said Tuesday.
The Mortgage Bankers Association noted that the refinance index increased more than 19% from the previous week, reaching its highest level since April of 2009. The seasonally adjusted purchase index rose about 13% from a week earlier — reaching its highest level in more than six months.
"Mortgage application volume increased sharply last week," said Michael Fratantoni, MBA's vice president of research and economics. "The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009."
He attributed the surge, in part, to increased refinancing volume as borrowers locked in at rates well below 4%.
"HARP volume has been steady in recent weeks at about 28% of refinance applications," he added, referriing to the government's Home Affordable Refinance Program.
The refinance share of mortgage activity grew to 79% of total applications from 78% the previous week.
The average loan size of a home purchased in the U.S. hit $243,733 in May, up from $238,135 in April. The average loan size on a refinancing grew from $219,664 in April to $226,576 in May.
The average interest rate on a 30-year, fixed-rate mortgage with a jumbo loan balance declined from 4.13% to 4.12%, while the average FRM backed by the Federal Housing Administration increased from 3.7% to 3.71%.
The average interest rate for a 15-year FRM increased from 3.2% to 3.23%, while the average contract rate for 5/1 adjustable-rate mortgages remained unchanged at 2.78%.