Mortgage applications surged 15.5% in the week ending July 15, said the Mortgage Bankers Association, with the Refi Index jumping 23.1% to ~2733 - its highest level since mid-June.  As a percent of total applications, refinancing share increased to its highest level since January to 70.1% from 65.6% previously. The Purchase Index was unchanged at 184.

Michael Fratantoni, MBA's Vice President of Research and Economics attributed the increase in part to mortgage rates moving back to their lowest level of the year in response to the flight to safety on the European debt crisis.  However, more likely was the second factor that he mentioned: "borrowers potentially impacted by impending decreases in the conforming loan limit may be opting to lock in fixed-rate financing now."

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