Dow Jones Newswires

6:17 a.m. CST, December 7, 2011

The number of mortgage applications filed in the U.S. last week rose 13 percent from the prior week, the Mortgage Bankers Association said Wednesday, as falling mortgage rates enticed new borrowers.

Refinance activity climbed 15 percent, according to the MBA’s weekly survey, which covers more than three-quarters of all U.S. retail residential mortgage applications. Purchasing rose by a seasonally adjusted 8.3% during the week ended Friday, reaching its highest level since Aug. 5.

“Coming out of the Thanksgiving holiday, applications increased significantly as mortgage rates dropped to their lowest levels in about two months,” MBA Vice President Michael Fratantoni said.

The four-week moving average for all mortgage applications is still down 3.2 percent after two weeks of declines.

The share of applications filed to refinance an existing mortgage jumped to 76 percent of total applications, up from 73.9 percent the previous week.

Adjustable-rate mortgages made up 5.7 percent of activity last week, down from 5.8 percent a week earlier.

The average rate on 30-year fixed-rate mortgages with conforming loan balances slipped to 4.18 percent from 4.21 percent%, while rates on similar mortgages with jumbo loan balances decreased to 4.52 percent from 4.55 percent. The average rate on FHA-backed 30-year fixed-rate mortgages fell to 3.98 percent from 4 percent.

The average for 15-year fixed-rate mortgages fell to 3.53 percent from 3.58 percent, while the 5/1 ARM average increased to 3.01 percent from 2.98 percent.