Declining interest rates weren’t enough to inspire home purchases or refinancings last week, the Mortgage Bankers Association reported today, as loan applications were down again.

The market composite index, which measures total home loan volume, fell 3.9 percent on a seasonally adjusted basis from the week before.

Home purchases saw the steepest drop-off in activity, as the purchase index sank 4.9 percent from the week before, following a 3 percent decline at mid-month. The index that tracks refinancings was down 2.5 percent last week, following a 4.2 percent drop two weeks ago.

The large decrease in purchase loans boosted the refinance share of mortgage applications to 38.7 percent last week and hiked the adjustable-rate mortgage (ARM) share to 20.4 percent.

Borrowing costs were either static or lower in the latest survey, with the average contract interest rate on 30-year fixed-rate mortgages holding at 6.6 percent, the average rate on the 15-year fixed-rate loan sinking to 6.24 percent from 6.28 percent, and the one-year ARM diving to 5.51 percent from 5.7 percent.

Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.54 on the 30-year loans, 1.41 on the 15-year, and 1.14 on one-year ARMs. These points include the origination fee and 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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