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Mortgage rates set another record low, sparking refinances

An ‘Open House’ sign is displayed as potential home buyers arrive at a property for sale in Columbus, Ohio.

Ty Wright | Bloomberg | Getty Images

Mortgage rates moved even lower last week after setting multiple record lows in recent months, spurring more borrowers to call their lenders and apply for a refinance, but homebuyers were quite as motivated. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 slipped to 3.01% from 3.05%, while points decreased to 0.37 from 0.52 for loans with a 20% down payment. 

In response, refinance application volume, which is most sensitive to weekly rate moves, rose 8% for the week and was 50% higher than a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. That is the highest refinance volume since mid-August.

Applications for a mortgage to purchase a home fell 2% for the

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