Americans were apparently more interested in picnics and fireworks last week than in buying or refinancing their homes.  At least that's what we might conclude were it not for the fact that the Mortgage Bankers Association's (MBA) Mortgage Market Index adjusts for seasonality.  With that in mind, we're left to place the blame squarely on interest rates for a slide in the Refi index, which lost 13 percent when compared to the week ended June 30.  Refinances accounted for 42.1 percent of all applications, the slimmest share since early May, down from 44.9 percent.

The seasonally adjusted Purchase Index fell by 3 percent from one week earlier and the unadjusted Purchase Index fell 22 percent.  The unadjusted index did remain 3 percent above its level during the same week in 2016.

The Market Composite Index, a measure of both refis and purchases, was down 7.4 percent.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

FHA applications accounted for 10.4 percent of the total compared to 10.2 percent a week earlier. The VA share increased to 11.5 percent from 10.3 percent and the USDA share dipped to 0.7 percent from 0.8 percent.

The average interest rates for fixed-rate mortgages (FRM) continued to increase on both a contract and an effective basis. The average contract rate for 30-year FRM with conforming loan balances ($424,100 or less) ticked up to 4.22 percent with 0.40 point from 4.20 percent with 0.31 point.

The contract rate for jumbo 30-year FRM, loans with balances greater than $424,100, jumped 9 basis points to 4.19 percent.  Points increased to 0.30 from 0.23.

FHA-backed mortgages had an average contract rate for 30-year FRM of 4.12 percent, up from 4.04. Points increased to 0.40 from 0.33.  

The rate for 15-year FRM increased to 3.50 percent from 3.43 percent.  Points rose to 0.45 from 0.32.  

The average contract rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.32 percent from 3.37 percent, with points increasing to 0.31 from 0.22. The effective rate was also lower than the prior week.  The ARM share of the total market declined to 6.7 percent from 7.2 percent.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.