A decline in interest rates last week was not enough to significantly impact home purchases or refinance activity, as overall mortgage application volume fell, the Mortgage Bankers Association reported today.

The market composite index, a measure of total mortgage application volume, dipped 0.2 percent last week, falling to 630.1 on a seasonally adjusted basis from 631.1 one week earlier.

Although the index that tracks home purchase applications was down 0.8 percent last week from the week before, the refinance index inched up 0.2 percent, according to MBA. Despite the growth in refis, their share of total mortgage applications decreased to 46.1 percent last week, overshadowed by an upswing in adjustable-rate mortgages (ARMs) to a 22.3 percent market share.

Borrowing costs on all loan types sank last week, with the average contract interest rate on 30-year fixed-rate mortgages down at 6.23 percent, the rate on 15-year fixed-rate loans down at 5.96 percent, and the average one-year ARM rate slipping to 5.84 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.09 on the 30-year loans, 1.1 on the 15-year, and 0.78 on one-year ARMs. Statistics are based on loan-to-value ratios of 80 percent.

The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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