Mortgage applications rose nearly 12% last week as interest rates fell, according to an industry survey.
Both refinance and purchase applications increased last week, the Mortgage Bankers Assn. said Wednesday. The group's refinance index surged 11% from a week earlier, while the seasonally adjusted purchase index jumped 12%.
But the increase comes as mortgage activity generally is trending downward and interest rates are expected to rise. On Tuesday, citing those concerns, the association cut forecast for mortgage originations in 2014 by $57 billion to $1.12 trillion.
Last week, however, interest rates fell. The average interest rate for a 30-year fixed mortgage with a balance of $417,000 or less slipped to 4.66% from 4.72% a week earlier.
The rates for a 30-year fixed loan with a balance above $417,000 fell to 4.58% from 4.66%.
Refinances accounted for 62% of applications last week, down from 63% a week earlier.
The mortgage trade group says its survey covers 75% of all retail residential mortgage applications across the country.