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The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending July 11, 2008. The Market Composite Index, a measure of mortgage loan application volume increased 1.7% from one week earlier. (Short answer, more folks are applying for mortgages). This marks the third week in a row that mortgage applications increased, following last week’s 7.5% increase.

Refinance applications increased 6.9%, Conventional applications increased 1.4% while the Government applications (largely FHA) decreased 8.2%.

The refinance share of mortgage activity increased to 39.2% of total applications from 37.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.1 from 10.0% of total applications from the previous week.

The average interest rate for 30-year fixed-rate mortgages decreased to 6.22% from 6.43%, with points increasing to 1.21 from 1.06 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

The average interest rate for 15-year fixed-rate mortgages decreased to 5.74% from 5.94%, with points increasing to 1.13 from 1.10 (including the origination fee) for 80% LTV loans.

The average interest rate for one-year ARMs decreased to 7.16% from 7.24%, with points increasing to 0.36 from 0.26 (including the origination fee) for 80% LTV loans.

(The average cost of a point is about $1,500)

The survey covers approximately 50% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Source RIS Media