Interest in home loan originations and refinances dwindled during the week ending June 22, according to mortgage records from a major organization, despite a weekly drop in mortgage rates.
According to the Mortgage Bankers Association's Weekly Application Survey, mortgage requests fell more than 7 percent from the week before, led by a sharp decline in refinancing activity. Purchase applications also dropped modestly, decreasing 1 percent from a week earlier.
"Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week," said MBA vice president of research and economics Michael Fratantoni.
The Federal Housing Administration's new streamline refinance premiums had an impact on applications, Fratantoni added. Those seeking home loans likely timed their requests to reduce their premiums, resulting in the previous week's spike.
The dip in application activity follows another considerable drop in mortgage rates. Freddie Mac's Primary Mortgage Market Survey for the week ending June 21 indicates averages for 30- and 15-year fixed-rate mortgages slipped to 3.66 and 2.95 percent, respectively.