Refinancing and purchase activity also increased as a result of the improved borrowing rates.

"Treasury rates fell last week causing a decline in mortgages rates. As a result, refinance applications picked up over the week, as some borrowers took advantage of this rate volatility to lock in a low fixed-rate loan," said Michael Fratantoni, Mortgage Bankers Association's (MBA) vice president of research and economics.

According to the MBA's survey, the average contract interest rate for 30-year fixed mortgages dropped 13 basis points to 5.04%. 

In response, the Refinance Index popped up 15.8% to ~2372 for the week ending April 16, while the Purchase Index rose 10.1% to ~240. 

As a percent of total application activity, refinancing share increased to 60.0% from 58.9%. ARM share slipped to 6.0% from 6.3%. 

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