Mortgage Application Volume Continues to Sink

The ""Mortgage Bankers Association"":http://mbaa.org/default.htm (MBA) reported another weekly drop in applications to start July.

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According to the group's Weekly Mortgage Applications Survey, loan application volume fell 4.0 percent on a seasonally adjusted basis for the week ending July 5. On an unadjusted basis, volume declined a more substantial 23 percent.

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The week's data included an adjustment for the July 4 holiday.

The Refinance Index decreased 4 percent on a weekly basis, once again reflecting the effects of rising mortgage rates. The refinance share of mortgage activity declined to 64 percent of total applications.

Purchase activity was also down. The seasonally adjusted Purchase Index fell an adjusted 3 percent week-over-week and was down 23 percent unadjusted. Compared to the same week last year, the index was up 5 percent--a considerably smaller increase than those reported in the past several months.

Meanwhile, mortgage rates continued to jump. The average contract interest rate for a 30-year fixed-rate mortgage was 4.68 percent, the highest since July 2011. Points increased to 0.46 (including the origination fee) for 80 percent loan-to-value ratio loans.