Mortgage application volume increased 3% from one week earlier as slightly lower interest rates resulted in more refinance activity, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending Aug. 4 found that the refinance index increased 5% from the previous week.

It is the third time in the last four weeks that mortgage loan application activity increased.

The seasonally adjusted purchase index increased 1% from one week earlier. On an unadjusted basis, the purchase index increased 0.3% compared with the previous week and was 7% higher than the same week one year ago.

The refinance application share increased to 46.7% from 45.5% the previous week.

Adjustable-rate loan application activity increased to 6.8% from 6.6%, while the share of applications for Federal Housing Administration-insured mortgages decreased to 10.2% from 10.3%.

The share of applications for Veterans Affairs-guaranteed loans increased to 10.7% from 10.1% but the U.S. Department of Agriculture/Rural Development share remained unchanged at 0.8%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased 3 basis points to 4.14%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100), the average contract rate decreased 4 basis points to 4.07%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 5 basis points to 4.02%, while for 15-year fixed-rate mortgages the average decreased 4 basis points to 3.41%.

The average contract interest rate for 5/1 ARMs increased 1 basis point to 3.31%.

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