Applications to refinance mortgages returned to highs last seen in February as a new round of record-low contract rates helped drive new business upward by 1.3% on a seasonally adjusted basis for the week ending June 1.

According to new survey figures compiled by the Mortgage Bankers Association, refis accounted for 78% of business, compared to 77% the week prior. (The results include an adjustment for the Memorial Day weekend.)

In other words, the purchase money business continues to struggle. Nevertheless, lenders are getting inundated with phone calls and emails about ultra-low rates. One Connecticut-based loan officer told National Mortgage News late Tuesday, “This is crazy. I am just slammed.”

Although the news appears to be rosy, total applications, on an unadjusted basis, fell 9% week-to-week. Purchase money applications dropped 13% during the same period. Compared to a year ago, the purchase business is 3% lower than a year ago.

Also of note in the latest survey: The MBA found the number of purchase applications with a 15-year fixed term was at its highest level of the year. The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances ($417,500 or less) decreased to 3.87%, the lowest rate in the history of the survey.

The MBA said the average contract interest rate on a 30-year FRM with jumbo loan balances (greater than $417,500) decreased to 4.13%, the lowest rate in the history of the survey.

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