Mortgage applications up slightly

MBA survey shows refinance and purchase volume increased in latest week as fixed-rate mortgage rates tumbled.

Last Updated: March 5, 2008: 9:42 PM EST

WASHINGTON (AP) -- Mortgage application volume increased 3% for the week ending Feb. 29, according to a weekly application survey by the Mortgage Bankers Association.

The trade group's application index increased to 684.9 from 665.1 the previous week.

Refinance volume increased 4.5% during the week, while purchase volume grew 1.4%. Refinance applications accounted for 52.4% of all mortgage applications during the week ending Feb. 29.

The index peaked at 1,856.7 during the week ended May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 684.9 means mortgage application activity is 6.849 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

Mortgage volume posted slight gains as fixed-rate mortgage interest rates tumbled. The average rate for traditional, 30-year fixed-rate mortgages fell to 5.98% from 6.27%.

The average rate for 15-year fixed-rate mortgages, often an option used for refinancing a home, fell to 5.26% from 5.77%.

Adjustable rates did not move as much as fixed rates. The average rate for a one-year adjustable-rate mortgage slipped to 5.83% from 5.84%.