Application volume increased by 12.8% on a seasonally adjusted basis for the week ended Dec. 2, as rates fell to their lowest levels in two months.
In addition, the changes in the Home Affordable Refinance Program are starting to have a small effect on origination activity, according to the Mortgage Bankers Association. The data for the previous week adjusted to take Thanksgiving into account.
Michael Fratantoni, MBA's vice president of research and economics, said that some lenders are seeing their refinance application volume double.
"Despite this surge, aggregate refinance activity is still below levels reported two weeks ago. Some lenders indicated they are beginning to see an increase in HARP loans, but that increase is still a small portion of the move this week," he added.
Purchase application volume is at its highest level since the first week of August, up 8.3% on a seasonally adjusted basis. On an unadjusted basis, it is up over 47% from the previous week and down less than 1% from the same week in 2010.
The Refinance Index increased by 15.3% from the previous week, as the market share of refi applications rose to 76% from 73.9% one week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) was down three basis points to 4.18%, while for 30-year FRMs with jumbo loan balances, the average contract rate fell by three basis points to 4.52%.
The average contract interest rate for 30-year Federal Housing Administration-insured loans declined by two basis points to 3.98% (which is its lowest point since January), while the average contract interest rate for 15-year FRMs fell five basis points to 3.53%.
