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Mortgage volume rises, boosted by low rates

/ Source: The Associated Press

Applications for home loans rose last week as rates on 30-year and 15-year fixed-rate loans sank to the lowest levels on the survey's record.

The Mortgage Bankers Association said Wednesday overall applications increased nearly 7.6 percent from a week earlier. That incorporates an adjustment for the Independence Day holiday.

Applications to refinance home loans climbed 8.6 percent. Applications taken out to purchase homes rose 3.4 percent, fueled by an 8-percent rise in government purchase applications.

Refinance applications made up nearly 79.4 percent of total applications, the highest since April of last year.

Mortgage rates have fallen since mid-April after investors, concerned over European debt problems and the health of the global economy, have poured money into the safety of U.S. Treasury bonds. That has caused the yields on those bonds to fall. Long-term fixed mortgage rates tend to track those yields.

The average rate for a 30-year fixed loan fell to 4.59 percent last week and the rate for a 15-year fixed loan dropped to 4.05 percent. Both were the lowest rates recorded in the MBA's survey, which has been conducted since 1990.

The Mortgage Bankers Association's survey covers more than 50 percent of all applications nationwide.