Mortgage applications soar as rates fall

This post comes from Matt Brownell at partner site MainStreet.

Mortgage rates keeping falling, and Americans are starting to notice.

The latest weekly survey from the Mortgage Bankers Association found that mortgage applications spiked an incredible 13% from the preceding week. And that's just the seasonally adjusted number. When not adjusting for seasonal trends (including the fact that the previous week included Memorial Day), the number of mortgage applications rose a whopping 24.5%.  Post continues after video.

The increase was largely fueled by a spike in refinancing as homeowners rushed to lock in lower rates, with the share of mortgage activity attributed to refinancing rising to 70%. That's the highest percentage since January this year, according to the MBA.

The overall rise in mortgage activity has an obvious culprit: Rates just keep getting lower.

"Mortgage rates have declined for eight of the past nine weeks," said MBA spokesman Michael Fratantoni in a statement. "Coming off of the Memorial Day holiday, refinance application volume increased significantly, as borrowers jumped to lock in the lowest mortgage rates since last November."

Indeed, according to RateWatch, the current average rate on a 30-year fixed-rate mortgage is just 4.657%, down from more than 5% as recently as April. Consumers can see the latest mortgage rates at BankingMyWay.com and at MSN Money.

Still, it's not all good news on the housing front. Despite the rise in mortgage activity, the National Association of Homebuilders' index of homebuilder sentiment fell three points this month. So while existing homeowners are locking in low rates on their homes, it still hasn't been enough to entice would-be homebuyers into pulling the trigger.

More on MainStreet and MSN Money:

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• 5 things to do before getting a mortgage
• Are homeowners associations on the way out?
• Calculator:Should you rent or buy?
• Have house prices already hit bottom?
• New incentives for homebuyers