Mortgage Applications Increase with Slight Rate Drop

A drop in mortgage rates paved the way for a rise in applications last week, the ""Mortgage Bankers Association"":http://mbaa.org/default.htm (MBA) reported.

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According to the group's Weekly Mortgage Applications Survey, the Market Composite Index, a measure of loan application volume, rose 7.7 percent for the week ending March 22. On an unadjusted basis, the index increased 8 percent week-over-week.

The Refinance Index also increased, jumping 8 percent compared with the previous week. Refinance share remained flat at 75 percent of total applications, MBA reported.

Meanwhile, the Purchase Index increased 7 percent on a weekly basis (both adjusted and unadjusted). Compared to the same time in 2012, last week's index was 10 percent higher.

By MBA's measure, the average contract interest rate for a 30-year fixed-rate mortgage was 3.79 percent last week, down from 3.82 percent previously.