Total mortgage application activity fell 15.8% in the week ending June 12 despite slightly lower average rates from a week earlier, according to a survey released today by the Mortgage Bankers Association (MBA). The volume of refinance applications plunged 23.3% in the week, pulling the refinance share of total mortgage applications down to 54.1% from 59.4% a week earlier. The slide in refinance popularity in recent surveys correlated with rising mortgage rates. But not this week. The free fall in refi applications came despite falling average contract interest rates in both short- and long-term mortgages. According to data tracked each week by the MBA, the average borrower closing on a 30-year fixed-rate mortgage in the same week ending June 12 locked into a 5.5% rate, down from 5.57% a week earlier. The average fixed interest rate for 15-year mortgages came in at 4.99% this week, from 5.1% a week earlier, while one-year adjustable-rate mortgages averaged 6.54% rates, from 6.75% a week before. Rates have even further to fall if borrowers expect to obtain much-needed refinanced mortgages, says Field Check Group analyst Mark Hanson in market commentary today. "At present I estimate the there are $200bn in refi loan applications in process at lenders and brokers across the nation of which most will die unless rates get back at 5% with little cost -- post-haste," he says. A separate application survey conducted by Mortgage Maxx and released Tuesday showed household activity declined 8.2% in the same week. The Mortgage Application Index -- or MAX -- adjusts total data to count multiple applications submitted by a single household as one participant. The index specifically for California slipped 6% in the week. The MAX publisher Paul Descloux, in his weekly commentary on the index, warned the refinance popularity wave is drying up as mortgage rates inch upward despite the Federal Reserve's best efforts. "The MAX continues to retreat as the efficacy of the Fed’s alphabet soup treatments become publically doubted," Descloux writes. "The MAX is now down 23 percent the past four weeks, and 38 percent off the 2009 high. With rates nearing six percent for pristine credits, mortgages are making a round trip back towards five-year highs." "For now," he adds, "housing looks to remain in intensive care as green shoots get shorn." Write to Diana Golobay.