A decline in purchase mortgage applications cancelled out most of a moderate increase in refinancing during the week ended July 21. Nonetheless, the Mortgage Bankers Association said its Market Composite Index eked out a slight gain. The Index was up 0.4 percent on a seasonally adjusted basis and 1.0 percent unadjusted.

The Refinance Index rose for the second straight week, increasing by 3.0 percent compared to the week ended July 14. The refinance share of the business was 46.0, up from 44.7 percent the prior week. The Purchase Index declined by 2.0 percent on both a seasonally adjusted and an unadjusted basis.  The unadjusted Purchase Index was 8.0 percent higher than the same week in 2016.

Both the FHA and the VA share of applications dropped; FHA from 10.7 percent to 10.2 percent and the VA share from 10.7 to 10.5 percent. Applications for USDA mortgages increased their share to 0.8 percent from 0.7 percent the previous week.

Interest rates declined for all loan types on both a contract and an effective basis. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less decreased to 4.17 percent from 4.22 percent. Points increased to 0.40 from 0.31.

Jumbo 30-year FRM, those mortgages with balances higher than the conforming limit, had an average rate of 4.06 percent with 0.24 point. The previous week the average was 4.18 percent, with 0.30 point.

Rates on mortgages backed by FHA also retreated. The average for 30-year FRM was 4.05 percent, down from 4.10 percent.  Points increased to 0.44 from 0.30.

Fifteen-year FRM had an average contract rate of 3.45 percent with 0.45 point. A week earlier the average rate was 3.48 percent with 0.39 point.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased by 3 basis points to 3.29 percent. Points increased to 0.26 from 0.21. The ARM share of applications increased from 6.7 percent to 6.8 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.