Demand for home loan refinancing rose for a fifth straight week, a development that may provide a much-needed jolt to a flailing economy as it could portend an increase in consumer spending.

The Mortgage Bankers Association on Wednesday said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended August 27 increased 2.7 percent. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 5.2 percent.

The MBA’s seasonally adjusted index of refinancing applications increased 2.8 percent, reaching the highest level since the week ended May 1, 2009.

Home loan refinancing puts extra cash into consumers’ hands that they can save, use to pay off existing debt or funnel into the economy through extra spending.

“Refinancing activity picked up again last week, reaching new 15-month highs, as borrowers took advantage of even lower mortgage rates,” Michael Fratantoni, MBA’s Vice President of Research and Economics, said in a statement.

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