Last week, Treasury yields experienced volatility, resulting in mortgage rates sliding below 4%. Despite the decline, the Mortgage Bankers Association indicates mortgage applications fell by 2.2%.

This means on an unadjusted basis, the index dropped 2.2% for the week ending on Nov. 15, 2019.

“U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below 4%,” said Joel Kan, MBA’s vice president of economic and industry forecasting. “Despite lower rates, mortgage applications decreased 2.2%, driven by an 8% slide in refinance activity.”

Although the Refinance Index experienced a decline last week, the MBA indicates that it still remains 152% higher than the same week one year ago.

However, since rates have stayed in the same narrow range of around 4% since July, Kan said the market may soon start seeing a slowdown in refinancing as the pool of eligible homeowners shrinks.

That being said, MBA’s data indicates that purchasing activity remains strong as the seasonally adjusted Purchase Index increased 7% from one week earlier, whereas the unadjusted Purchase Index jumped 8% from the previous week.

“Purchase applications were 7% higher than a year ago, which adds another solid data point to the recent increases in new home sales and housing starts,” Kan said. “There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential homebuyers.”

Here is a more detailed breakdown of this week’s mortgage application data:

• The refinance share of mortgage activity decreased to 59.5% from last week’s 61.9%.
• The adjustable-rate mortgage share of activity fell to 4.6% of total applications.
• The Federal Housing Administration’s share of mortgage apps declined to 13% from last week’s 13.1%.
• The Department of Veterans Affairs share of applications moved forward to 12.9% from last week’s 12.7%.
• The Department of Agriculture’s share of total applications remained unchanged from last week’s 0.5%.
• Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased from last week’s rate of 4.03% to 3.99%.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) retreated from last week’s 3.98% to 3.93%.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.8% from last week’s 3.85%.
• The average contract interest rate for 15-year fixed-rate mortgages dropped from last week’s 3.43% to 3.4%.
• The average contract interest rate for 5/1 ARMs rose to 3.51% from last week’s 3.4%.