Mortgage application volume up slightly

Home loan applications rise 2.9% last week as interest rates fall.

May 14, 2008: 7:51 AM EDT

WASHINGTON (AP) -- Mortgage application volume rose 2.9% during the week ending May 9, according to trade group Mortgage Bankers Association's weekly application survey.

The MBA's application index increased to 674.4 during the week, compared with 655.4 one week earlier.

Refinance volume increased 6.5% during the week, while purchase volume fell 0.7%. Refinance volume accounted for 48.7% of total mortgage applications during the week ending May 9.

The index peaked at 1,856.7 during the week ending 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 674.4 means mortgage application activity is 6.744 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.

Application volume rose slightly as interest rates declined during the week. The average rate for traditional, 30-year fixed-rate mortgages fell to 5.82% from 5.91% the previous week.

The rate for 15-year fixed-rate mortgages, often a popular option for refinancing a loan, fell to 5.38% from 5.49%.

The average interest rate for one-year adjustable-rate mortgages fell to 6.6% from 6.77%.