The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 18th, 2011.

The MBA's loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans. In a falling mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out lower monthly payments. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (may boost consumer spending. Also allows debtors to pay down personal liabilities faster). A trend of declining purchase applications implies home buyer demand is shrinking.

Excerpts from the Release...

The Market Composite Index, a measure of mortgage loan application volume, increased 13.2 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 14.8 percent compared with the previous week.

The Refinance Index increased 17.8 percent from the previous week.   The four week moving average is up 1.8 percent. The refinance share of mortgage activity increased to 65.7 percent of total applications from 64.0 percent the previous week.

The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier. The unadjusted Purchase Index increased 9.6 percent compared with the previous week and was 6.9 percent lower than the same week one year ago.  The four week moving average is up 1.6 percent for the seasonally adjusted Purchase Index.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.00 percent from 5.12 percent, with points increasing to 0.97 from 0.85 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.28 percent from 4.34 percent, with points decreasing to 0.80 from 0.85 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

"Ongoing turmoil in the Middle East brought interest rates lower last week.  Borrowers took advantage of these lower rates, bringing application activity back near levels from two weeks ago, following sharp declines last week," said Michael Fratantoni, MBA's Vice President of Research and Economics.

READ MORE: OUTLOOK UPGRADED FOR MORTGAGE RATES