Mortgage applications decreased 1.2% from one week earlier, according to data from the Mortgage Bankers Association’s weekly mortgage applications survey for the week ending May 23.  

The Market Composite Index, a measure of mortgage loan application volume, fell 1.2% on a seasonally adjusted basis from one week earlier. 

The Refinance Index dropped 1% from the previous week.  The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 15% lower than the same week one year ago.

The refinance share of mortgage activity remained unchanged at 52% of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8% of total applications.

“Rates haven’t been this good in almost a year, and clients are taking notice," Quicken Loans vice president Bill Banfield said. "While applications were down this week, in the past few months we’ve seen an increase in folks who are taking advantage of this unprecedented opportunity to buy a home or refinance.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.31%, the lowest level since June 2013, from 4.33%, with points decreasing to 0.15 from 0.2 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.  The effective rate decreased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.23%, the lowest level since June 2013, from 4.24%, with points increasing to 0.16 from 0.09 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.04%, the lowest level since June 2013, from 4.06%, with points decreasing to -0.45 from -0.39 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.42%, the lowest level since October 2013, from 3.43%, with points decreasing to 0.06 from 0.15 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.13% from 3.14%, with points decreasing to 0.19 from 0.29 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.