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Mortgage activity spiked in the past week thanks to long-term interest rates that have returned to the lowest point in all of 2006. Both consumers interested in buying a home and those who want to refinance their existing mortgage applied for loans in large numbers, according to the latest Weekly Mortgage Applications survey from the Mortgage Bankers Association (MBA).

For the week ending December 1, the MBA’s survey showed that the weekly Market Composite Index, which measures mortgage loan application volume, increased 8.1 percent overall from one week earlier.

Bob Walters, chief economist of Quicken Loans, says long-term interest rates that have returned to near-historic low levels are the reason for the increase in people looking to buy or refinance a home, and that those rates could go even lower.

“The slowing economy has pushed long-term interest rates to their lowest point of the year and brought more home buyers into the market. Where rates go from here depends largely upon future economic data such as Friday’s Employment Report,” says Walters. “For now, however, long-term rates have caused the refi boom we’ve experienced the past few months to gain speed as homeowners flock from adjustable rate mortgages to the security of a fixed-rate mortgage.”

That “refi boom” Walters mentions is evidenced by a 13.7 percent increase in the Refinance Index from a week prior. Applications to purchase a home grew nicely as well, rising 4.9 percent above last week’s number.

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