Total mortgage applications last week gave back more than half of the prior week's bounce and fell 2.8%. Applications so far in May are 6.5% ahead of April, according to the Mortgage Bankers Association.

Purchase applications dropped 4.1% but in May still are 3.1% ahead of April. During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.

Applications to refinance fell 1.2% yet in May are 11.2% higher than in April.

The effective interest rate on a conventional 30-year mortgage fell to 5.83% from 5.88% the week prior. The effective rate on a 15-year mortgage fell to 5.42%.

The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.