Mortgage application volume was up13% on a seasonally adjusted basis last week, the Mortgage Bankers Association said, but the activity was due entirely to the highest level of refinancings seen since May, 2009.

The Refinance Index increased 17.1% from the previous week. The seasonally adjusted Purchase Index, however, decreased 3.4% from one week earlier after posting several gains in recent weeks. The unadjusted Purchase Index decreased 4.6% compared with the previous week and was 38.6% lower than the same week one year ago.

The four-week moving average for the seasonally adjusted Market Index was up 2.6%. The four week moving average is up 0.1% for the seasonally adjusted Purchase Index, while this average is up 3.2% for the Refinance Index.

The refinance share of mortgage activity increased to 81.4% of total applications from 78.1% the previous week, the highest refinance share observed since January 2009.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.60% from 4.57%, with points increasing to 0.92 from 0.89 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The rate for 15-year fixed-rate mortgages increased to 3.99% from 3.95%, with points decreasing to 1.05 from 1.08. The rate for one-year ARMs decreased to 6.90% from 7.00%, with points decreasing to 0.21 from 0.22.