by Calculated Risk on 5/23/2012 08:30:00 AM

From the MBA: Record Low Mortgage Rates Fuel Third Consecutive Increase In Refinance Applications In Latest MBA Weekly Survey

The Refinance Index increased 5.6 percent from the previous week. This is the third consecutive weekly increase in the Refinance Index which is at its highest level since February 10, 2012. The seasonally adjusted Purchase Index decreased 3.0 percent from one week earlier to its lowest level since April 20, 2012.

"Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market. As a result, applications for refinance loans have increased for the third straight week and are at the highest level since February of this year. The HARP share of refinance applications was essentially unchanged over the week at 28 percent, so it was not the primary driver of the increase over the previous week." [said] Michael Fratantoni, MBA's Vice President of Research and Economics.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.93 percent, the lowest rate in the history of the survey, from 3.96 percent,with points increasing to 0.39 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

The purchase index is still very weak.