A sharp drop in demand for government loans caused mortgage applications to fall 6.7% this past week.
The Mortgage Bankers Association said the refinance index fell 8% over the previous week as fewer borrowers obtained government loans. Still, the HARP 2.0 share of refinance applications is up to 24%, compared to 20% three weeks ago.
In addition, the seasonally adjusted purchase index grew by less than 1%, suggesting unchanged demand in new home loan applications.
Overall, the refinance share of mortgage activity declined to 78% of total applications, compared to 79% the previous week.
The average contract, interest rate for a 30-year fixed-rate mortgage with a conforming loan balance declined to 3.86% from 3.88%, the lowest rate since the MBA began tracking rates. The average, 30-year FRM with a jumbo loan balance declined from 4.12% to 4.08%.
The average interest rate for a 30-year FRM backed by the FHA declined from 3.71% to 3.69%.
Meanwhile, the average rate for a 15-year FRM declined from 3.24% to 3.2%, the lowest in survey history.
The average contract interest rate for 5/1 ARMs declined from 2.81% to 2.76%.