Homeowners take advantage of lower rates to refinance

Mortgage applications rose for the third week in a row as borrowers reacted to low mortgage rates.

Refinancing saw a jump in activity, increasing 5 percent from the previous week and was 207 percent higher than the same week a year ago.

The refinance share of mortgage activity increased to 65.5 percent of total applications from 64.5 percent in the prior week.

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“The refinance index climbed to its highest level since June 2013, and refinance loan sizes also increased as a result of an active jumbo lending market,” Mortgage Bankers Association Associate Vice President Joel Kan. “Last month was the strongest January for purchase applications since 2009, which is perhaps a sign that mild weather brought out prospective buyers earlier than normal."

The 30-year fixed-rate mortgage increased slightly to 3.72 percent from 3.71 percent.

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Demand for mortgages increased 1.1 percent from the prior week, according to the MBA's Weekly Mortgage Application Survey.

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The seasonally adjusted purchase index rose 6 percent from last week, which may have been boosted by mild weather encouraging prospective buyers to come out.

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The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.