[Update 1: Adds Mortgage Maxx Index Data] Mortgage loan application volume rose and interest rates declined in the week ending September 4, according to the Mortgage Bankers Association's (MBA) weekly Applications Survey. The MBA's Market Composite Index, which measures mortgage loan application volume, increased 17% on a seasonally adjusted basis from the week prior. On an unadjusted basis, the index increased 15.8% from last week and 64.5% from the same week one year earlier. The Mortgage Application Index (MAX), a separate index produced by Mortgage Maxx, increased 2% in the same time period. The index adjusts total application volume by counting multiple submissions from a single household as one application. In its analysis, Mortgage Maxx said refinancings are not responding to prevailing rates, and the index is expected to gradually deflate through the end of the year, “absent new government/Fed heroics.” The MBA’s refinance index increased 22.5% from one week prior, the biggest jump since mid-March. The seasonally adjusted purchase index increased 9.5% from the week earlier, the largest gain since April. The purchase index is at its highest level since the first week of January. The share of refinance mortgages increased to 59.8% of total application activity, up from 56.5% the previous week. Adjustable rate mortgages (ARMs) took a 5.8% share this week, up from 5.6% the week prior. The MBA also reported the average interest rate decreased 13 bps from 5.15% to 5.02% and points increased from 1.09 to 1.23 for 30-year fixed-rate mortgages (FRMs) with an 80% loan-to-value (LTV). The average interest rate for 15-year FRMs with 80% LTV decreased 12 bps from 4.57% to 4.45% and points increased from .085 to 1.13. The average interest rate for one-year ARMs with 80% LTV decreased 2 bps from 6.71% to 6.69%, and points decreased to 0.19 from 0.20. Write to Austin Kilgore.