According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were down last week for loans with conforming balances and the drop helped drive mortgage demand upward. In fact, demand for loans to buy homes was up 9 percent from the week before and is now 2 percent higher than the same week one year ago. Mike Fratantoni, MBA’s chief economist, said the increase in home buying activity follows several weeks of volatility. But though encouraging, the improvement wasn’t evenly distributed. “The rise in purchase activity was led by conventional purchase applications, which surged almost 12 percent, while government purchases were essentially unchanged over the week,” Fratantoni said. “This also pushed the average loan size for purchase applications higher, which likely meant there were fewer first-time home buyers in the market last week.” The survey shows rates were down for 30-year fixed-rate mortgages with conforming loan balances but unchanged for both jumbo loans and 15-year fixed-rate loans. Rates for loans backed by the Federal Housing Administration were up over the previous week. The MBA’s survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.