The refinance side of the mortgage market saw yet another pickup in application activity in mid-May, boosting total volumes for the third straight week.
The Mortgage Bankers Association's  Market Composite Index , a weekly released measure of loan application volume, edged up a seasonally adjusted 0.9 percent for the week ending May 16, the group reported. Removing seasonal touches, the index rose just 0.4 percent week-over-week.
Mike Fratantoni, MBA's chief economist, said the recent downward trend in mortgage rates—which hit a six-month low last week —has helped push up demand for loans.
"Renewed concerns about the state of the global economy, particularly in Europe, led to a flight to quality to US Treasury securities, thereby pushing interest rates down in the US," Fratantoni said.
MBA's measure of refinance applications rose 4 percent over the previous week, bringing the refinance share of total applications up to 52 percent.
At the same time, the association's seasonally adjusted Purchase Index dropped 3 percent. The latest decrease is more sour news for a market segment that will need to strengthen as refinance volumes remain more than 65 percent below last year's levels.