According to the Mortgage Bankers Association’s Weekly Applications Survey, refinance demand surged last week as mortgage rates fell to yet another survey low. The Refinance Index rose 22 percent from the week before and is near its highest level this year. Michael Fratantoni, MBA’s vice president of research and economics, said refinance application volume increased to near peak levels as mortgage rates dropped due to growing concern about the economy. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 3.74 percent from 3.79 percent the week before. Because of the spike in refinance activity, the Market Composite Index, which measures total mortgage loan application volume, was up 16.9 percent from one week earlier. The seasonally adjusted Purchase Index was virtually unchanged from the previous week.