Mortgage rates decline for the third consecutive week causing refinancings to surge

Mortgage interest rates fell for the third consecutive week, and borrowers have taken note - mortgage applications surged last week mostly because of an increase in refinancing activity. The 30-year fixed-rate mortgage averaged 3.66 percent during the week ending Janary 15, the lowest level since May 2013 when it averaged 3.59 percent, according to Freddie Mac's Primary Mortgage Market Survey. It was also the first time the 15-year fixed rate mortgage dipped below 3 percent since the week ending May 30.

Lower rates are helping keep mortgage lenders busy, mostly with refinancings. Mortgage applications last week increased 49 percent from the previous week, according according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 9. That was the largest weekly gain since November 2008 with the refinance index increasing 66 percent to the highest level since July 2013.