Overall mortgage application volume increased 8.1 percent last week on a seasonally adjusted basis from the week before, inspired by a significant drop in interest rates, the Mortgage Bankers Association reported today.

The seasonally adjusted refinance index increased by 13.7 percent to 1,989.7 from 1,749.6 the previous week, and the purchase index increased by 4.9 percent to 426.6 from 406.7 one week earlier.

The refinance share of mortgage activity increased to 50.1 percent of total applications from 46.9 percent the previous week, and is now at its highest level since April 2004. The adjustable-rate mortgage (ARM) share of activity decreased to 23.9 from 24.5 percent of total applications from the previous week, and is at its lowest level since October 2003.

Seasonally adjusted home sales in Canada numbered 38,303 units in October, the Canadian Real Estate Association reported today, which is down 0.8 percent compared to September. Home sales activity via the nation’s Multiple Listing Service system is still on track to set a new annual record.

Sales activity for the first 10 months of the year remained 0.7 percent above levels recorded for the same period last year, and the number of transactions for the first 10 months year are ahead of 2005 levels in all provinces except British Columbia and Ontario, according to the report.