The Mortgage Bankers Association reported that overall mortgage applications slipped 0.4% last week following a 4.0% decline during the prior week. Applications began this month down 1.0% from the May average. Applications to purchase a home fell 4.4% w/w to the lowest level since mid-November. During the last ten years, there has been a 42% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales. The correlation has lessened recently from 61% before 2008. Applications to refinance a mortgage rose 1.3% w/w and were near the December average.

Applications for fixed interest rate mortgage financing began this month slightly lower than May (-8.7% y/y) and remained off nearly one-half from the August peak. Applications for variable-rate financing began the month down 2.9% (+9.3% y/y) from May.

The effective fixed-interest rate on conventional 15-year mortgages fell to 3.93% last week, near the record low of 3.88% reached last October. For 30-year mortgages, the rate slipped to 4.73%. Interest rates on fixed 15-year and 30-year mortgages are closely correlated (near-90%) with the rate on 10-year Treasury securities.

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 covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. The figures for weekly mortgage applications are available in Haver's SURVEYW database.