While the drop isn't as severe as the prior week, mortgage applications still posted a 3.5% drop from one week earlier, the latest data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 29 found.

Split up, the Refinance Index decreased 4% from the previous week, as the seasonally adjusted Purchase Index decreased 2% from one week earlier to the lowest level since February 2016.

This is compared to the previous report, which posted that the Refinance Index and Purchase Index decreased 15% and 3%, respectively, from the previous week.

The refinance share of mortgage activity dipped to 60.7% of total applications from 61.1% the previous week. The adjustable-rate mortgage share of activity remained unchanged at 4.7% of total applications.

The Federal Housing Administration’s share of total applications declined to 9.4% from 10.1% last week, as the Veteran Affairs’ share of total applications ticked higher to 12.1% from 11.9% the week prior. The United States Department of Agriculture’s share of total applications slightly increased to 0.7% from 0.6% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.67% from 3.69%.

In addition, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.65% from 3.67%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.54% from 3.56%.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.93% from 2.94%, while the average contract interest rate for 5/1 ARMs decreased to 2.90% from 2.96%.