Applications for U.S. home mortgages jumped last week as a drop in interest rates fueled demand for refinancings, though purchases tumbled, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 6.9 percent in the week ended April 13.
The MBA's seasonally adjusted index of refinancing applications surged 13.5 percent, but the gauge of loan requests for home purchases dropped 11.2 percent. It was the second week in a row purchases have declined.
"Renewed concerns about sovereign debt in Europe led to a drop in rates last week, with the 30-year rate tying our survey low, reached in early February. Refinance activity picked up in response," Jay Brinkmann, MBA's chief economist, said in a statement.
The refinance share of total mortgage activity climbed to 75.2 percent of applications from 70.5 percent the week before.
Fixed 30-year mortgage rates averaged 4.05 percent, down 5 basis points from 4.10 percent.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
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