Mortgage application volume hit a three-year high in the week ending September 28, according to the Mortgage Bankers Association.
MBA's Weekly Mortgage Application Survey showed a 16.6 percent seasonally adjusted increase from a week earlier. The Refinance Index had its highest jump since April of 2009 with a 20 percent spike, while the Purchase Index was up 4 percent from a week prior.
The surge in refinance applications increased the refi share of all applications to 83 percent from 81 percent in the previous week.
"Financial markets continue to adjust to QE3, as the ongoing presence of the Federal Reserve as a significant buyer of mortgage-backed securities applies downward pressure on rates," said Mike Fratantoni, MBA’s vice president of research and economics. "Although there was a slight decline in the Home Affordable Refinance Program share of refinance activity, the level of HARP volume remains steady."
The recent announcement of QE3 helped force down mortgage rates to new record lows in September, which could have been a contributing factor to the run on refinances, as people try to lock in their mortgages at the lowest rate possible.