Demand for loans to purchase homes surged last week, according to the Mortgage Bankers Association’s Weekly Applications Survey. The seasonally adjusted Purchase Index gained 9 percent from one week earlier, contributing to a 5.3 percent increase in overall mortgage loan application volume. Mike Fratantoni, MBA’s chief economist, said the spike in demand for purchase applications likely reflects the impact of continued growth in the job market and lower mortgage rates. In fact, average mortgage rates fell across all loan categories last week, including 30-year fixed-rate loans with conforming and jumbo balances, FHA loans, and 15-year fixed-rate loans. The drop brought average rates on conforming and jumbo balances to their lowest level all year. Also, the Refinance Index gained 2 percent from the week before. The MBA’s survey has been conducted weekly since 1990 and covers more than 75 percent of all U.S. retail residential mortgage applications. More here.