Applications for home purchases and mortgage refinances both declined last week, despite a 10 basis point decline in interest rates, according to the Weekly Applications Survey issued by the Mortgage Bankers Association (MBA) on Wednesday.

For the week ending June 26, 2009, MBA reported that total mortgage application volume fell by 18.9 percent from one week earlier, and was down 7.4 percent compared with the same week last year.
MBA’s Purchase Index decreased 4.5 percent for the week, but the Refinance Index plummeted 30.0 percent. The Refinance Index is at its lowest level since November 2008. The refinance share of mortgage activity also dipped to 46.4 percent of total applications, down from 54.0 percent the previous week.
The decline in home loan petitions was pronounced, even though MBA reported average contract interest rates declined across the board last week.
The rate for 30-year fixed-rate mortgages (FRMs) averaged 5.34 percent, down from 5.44 percent one week earlier. Fifteen-year FRM rates came in at 4.81 percent, compared to 4.93 percent the week before. And the average rate for 1-year adjustable-rate mortgages (ARMs) decreased to 6.52 percent from 6.54 percent.