In the week, refinancing activity also picked up, climbing 6 percent over the previous week.
Interest rates for 30-year, fixed-rate conforming mortgages fell from 3.53 percent to 3.52 percent, the lowest rates in the history of the MBA survey, with points rising from 0.4 to 0.41.
The average interest rate for 30-year contracts on jumbo loans -- those larger than $417,500 -- rose from 3.75 percent to 3.79 percent with points rising from 0.31 to 0.32.
Interest rates for 15-year, fixed-rate mortgages fell from 2.89 percent to 2.86 percent, also a low for the survey, with points falling from 0.35 to 0.27.
The average rate for 30-year loans backed by the Federal Housing Administration fell from 3.36 percent to 3.34 percent with points falling from 0.65 to 0.62. Average rate for short-term, adjustable-rate mortgages fell from from 2.6 percent to 2.62 percent in the week with points rising from 0.37 to 0.4, the MBA said.