U.S. Mortgage Applications Up Sharply As Rates Drop

(RTTNews) - U.S. mortgage applications jumped sharply last week, as buyers scrambled to take advantage of a notable drop in interest rates.

Total application volume on a seasonally adjusted basis rose 11.9 percent on the week, according to the Mortgage Bankers Association. Applications to refinance rose 11 percent and applications to purchase a home increased 12 percent, both seasonally adjusted.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.66 percent from 4.72 percent.

"The drop in rates was large enough to trigger a pickup in refinance volume," noted Michael Fratantoni, the association's chief economist told CNBC. "The increase in purchase volume is more likely reflecting an increase coming out of the holidays, beyond what our seasonal adjustment model anticipated."