WASHINGTON ( TheStreet) -- Mortgage applications increased 2.2% last week as mortgage rates edged lower. The volume of mortgage loan applications increased 2.2% on a seasonally adjusted basis in the week ending Jan. 7, the Mortgage Bankers Association said early Wednesday. Mortgage activity rose 2.3% in the prior week .
Refinancing application volume increased 4.9% from the previous week, following a 3.9% uptick in the prior week. Home-purchase loan applications fell 3.7% in the week, on a seasonally adjusted basis, after falling 0.8% a week earlier. On an unadjusted basis, the MBA's purchase index was 10.5% lower than in the year-earlier week.
A total of 72.1% of all loan applications last week were for refinancing existing mortgages, up from a 71% share in the prior week. The average rate on a 30-year fixed mortgage fell to to 4.78%, from 4.82% in the prior week. It was the second consecutive week of declines in the 30-year fixed rate and remains 15 basis points below the survey's seven-month high observed two weeks ago. Still, mortgage rates remain near all-time lows. Rising mortgage rates, which some market watchers view as deterring home buying activity, are not likely to continue to rise, but are also unlikely to return to record lows seen in recent months, Paul Anastos, president of Mass.-based Mortgage Master, told TheStreet recently.