Mortgage application filings rose 3.8% for the week ending May 18 as low interest rates spurred along refinancing activity, an industry trade group said.

The Mortgage Bankers Association said refinancing application activity shot up 5.6% while an index measuring home purchases fell 3% from a week earlier.      

“Continuing negative developments in the sovereign debt crisis in Europe, particularly in Greece and Spain, as well as the recent French elections, which have shifted political power in a manner that will likely show less support for European austerity, helped push the U.S. 10-year Treasury yield below 1.7 percent last week,” said Michael Fratantoni, MBA’s vice president of research and economics. “Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market.  As a result, applications for refinance loans have increased for the third straight week and are at the highest level since February of this year.”

Refinancing activity rose from representing 74.9% of all mortgage activity to 76.6%.

Mortgage rates continued to decline with the 30-year, fixed-rate mortgage with conforming loan limits under $417,500 falling from 3.96% to 3.93%, the lowest rate in the survey’s history.

Meanwhile, the 30-year, FRM for jumbo loans saw its rate jump from 4.20% to 4.25%.  The average contract interest rate for the 30-year, FRM backed by FHA fell from 3.75% to 3.73%.

The 15-year, FRM remained unchanged at 3.26%, the lowest rate in the history of the survey.

In addition, the 5/1 ARM rate increased from 2.80% to 2.83%.