According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell sharply last week. In fact, rates were down across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The decline brought mortgage rates to their lowest level since August. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said falling mortgage rates led to a surge in refinance activity. “As seen a few times this year, the large drop in rates caused another surge in refinance applications,” Kan said. “The refinance index increased 10 percent to its highest level since late August, with both conventional and government refinances experiencing an upswing.” The rate drop didn’t boost home buying activity, however. Purchase activity was relatively flat, though it remains 10 percent higher than last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.