According to the Mortgage Bankers Association, interest rates fell last week. As a result, mortgage applications increased by a seasonally-adjusted 32.2 percent. In real terms, total mortgage applications shot up an astounding 8.7 percent compared to the same week a year ago. Now, near record low interest rates are making homes much more affordable.

Rates on 30-year fixed mortgages averaged 5.73 percent, down from 6.05% only the week before. That could explain why financings were 57.7 percent of mortgage applications last week up from 50.9 percent the week before. The typical homeowner plans to stay in their home about 10 years. That could explain why more people were interested in refinancing their mortgages last week than putting their houses on the market.

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