The Mortgage Bankers Association said Wednesday that mortgage applications increased in the week ended July 30, with its Market Composite Index up 1.3% percent on a seasonally adjusted basis from a week earlier. More significantly for the real estate market, the Purchase-Only Index posted its third consecutive weekly increase with a 1.5% gain.

The gain in the Purchase Index was driven by government-backed mortgage purchase applications, which increased 3.4% from the prior week, while conventional purchase applications were essentially flat. The unadjusted Purchase Index increased 1.5% compared with the previous week, was up 7.1% relative to four weeks ago, but was 33.7% lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 0.3%. The four week moving average is up 0.9% for the seasonally adjusted Purchase Index, while this average is up 0.2% for the Refinance Index.

The refinance share of mortgage activity remained flat at 78.0% of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4% from 5.7% of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.60% from 4.69%, with points increasing to 0.93 from 0.88.15-year fixed-rate mortgages decreased to 4.03% from 4.12%, with points increasing to 1.01 from 0.83, the lowest 15-year contract rate ever recorded in the survey. ARMs decreased to 7.10% from 7.15%, with points decreasing to0.21 from 0.23.