Mortgage applications fell 7.1% for the week ending June 22 as the nation's refinancing volume cooled, the Mortgage Bankers Association said Wednesday.
The MBA attributes the decline to lower demand for refinance applications on government loans, which more than doubled a week earlier.
"The large swings in activity were due to the implementation of FHA’s new premiums on streamline refinances, and borrowers timing their applications to lower their premiums," said Michael Fratantoni, MBA's vice president of research and economics.
The MBA's refinance index fell 8% on a seasonally adjusted basis while the purchase index declined 1% from a week before. The refinance share of mortgage activity edged down from 80% of all applications to 79%.
The average contract interest rate for the 30-year, fixed-rate mortgages with conforming loan balances increased from 3.87% to 3.88%. Meanwhile, the average contract interest rate for a 30-year, FRM with jumbo loan balances increased from 4.06% to 4.12%.
The average 30-year, FRM backed by the FHA declined from 3.72% to 3.71%. Meanwhile, the average contract interest rate for the 15-year, FRM declined from 3.25% to 3.24%.
In addition, the rate for the 5/1 ARMs grew from 2.75% to 2.81%.