Mortgage Loan Applications Up 42% from Last Year

Mortgage Loan Applications increased 2.3% in the week ending May 15, according to the Mortgage Bankers Association on Wednesday morning. The private industry group said their weekly index ― the Market Composite Index, which began in 1990 ― is now at 915.9, a 42% advance compared to this time one year ago.

During the same period, the Refinance Index increased 4.5% to 4794.4, but the Purchase Index decreased 4.4% to 254.0. The share of mortgages that are refinance-related was 73.6% in the survey, compared to 71.9% in the previous week. Adjustable-rate mortgages accounted for 2.4% of total applications.

The four week moving average for the seasonally adjusted Market Index moved down 6.4% in the week.

According to the MBA, the average interest rate for 30-year fixed-rate mortgage fell to 4.69% from 4.76%.

Treasury Secretary Tim Geithner, who testifies to the Senate Banking Committee Wednesday at 9:30 am, recently called rates below 4.80% “historically low” while observing that a stabilizing housing market was helping financial markets to heal.

The MBA survey covers about half of the nation’s new loans for residential mortgages.