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Mortgage Applications Take a Hit as Government Refinances Decline

Mortgage application volume remains on the decline, according to the latest data from the ""Mortgage Bankers Association"":http://mbaa.org/default.htm (MBA).

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MBA's Weekly Mortgage Applications Survey showed loan application volume dropping 1.2 percent on a seasonally adjusted basis for the week ending July 19. On an unadjusted basis, the index fell 1 percent.

The weekly Refinance Index decreased 1 percent from the previous week, driven largely by a 12 percent drop in government refinances as conventional refinances picked up by 2 percent. According to MBA's report, last week saw the Refinance Index falling to its lowest level since July 2011. The refinance share of total mortgage activity remained flat at 63 percent.

Meanwhile, the seasonally adjusted Purchase Index decreased 2 percent week-over-week (the unadjusted index was down the same amount), coming up 6 percent higher than the same week last year.

The average contract interest rate for a 30-year fixed-rate mortgage was 4.58 percent for the week, down 10 basis points from the previous survey. Points fell to 0.40 from 0.42 (including the origination fee).

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