The Mortgage Bankers Association reported that total mortgage applications fell another 1.1% last week following the 11.3% decline during the week prior. As a result of increases earlier in the month, applications in June grew 9.9% versus the May average which rose 6.5% versus April.

Purchase applications slipped 0.4% adding to the 9.4% w/w drop during the prior week. In June purchase applications rose 1.3% from May which rose 3.1% from 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 1.8% w/w but in June were 21.2% versus May.

The effective interest rate on a conventional 30-year mortgage fell sharply to 5.71%, down from the 5.92% averaged during May. It was the lowest rate since March 2004. The effective rate on a 15-year mortgage also fell sharply to 5.33%.

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.