The Federal National Mortgage Association said that low mortgage rates in May spurred demand for 15-year mortgages, while the popularity of 30-year mortgages slipped.
Fannie Mae said intermediate-term mortgages increased in popularity in May, as homeowners took advantage of attractive rates to choose loans that allow faster build-up of equity.
It said the mortgages, such as 15-year loans, accounted for one-third of its business in May. Loan volume for the 15-year loans rose to 33.5 percent from 29.6 percent in April.
Loan volume of 30-year fixed-rate mortgages accounted for 54.6 percent of the company's volume, down from 57.4 percent in April.
Fannie Mae also estimated that homeowners who refinanced their homes during the first three months of the year had lowered their average mortgage rates by almost 2 percentage points and cut their loan terms by an average of four years.
In a separate report, Countrywide Credit Industries Inc., the nation's top lender for single-family homes, said last week that it funded a record $4.4 billion in mortgages last month -- up 76 percent from a year ago.
Countrywide said refinancing accounted for 75 percent of its total loan activity, with adjustable-rate mortgages accounting for percent of its lending.