A slight hurdle was hit after several weeks of increasing demand for mortgage loans and new purchases, a housing industry survey said. Even with average interest rates for a 30-year mortgage moving downwards in the week, demand for refinance loans, new loans, and purchases each declined.

The Mortgage Bankers Association (MBA) said interest rates for a 30-year loan moved down 9 basis points to 5.15% in the week ending August 28.

That rate matches a six-week low seen two weeks ago, yet refinances decreased 3.1% in the week, after hitting their highest level since early June in the week before. That helped caused the Market Composite Index ― which tracks the volume of mortgage applications ― to fall 2.2%.

The annual figures give some idea of how much things have improved since last year though: demand for loans has increased 22.7% since August 2008.

In a news release last week, Frank Nothaft, Freddie Mac vice president and chief economist, said low interest were “helping to sustain a high level of affordability in the home-purchase market.”

The MBA’s Purchase Index also fared poorly, skidding 0.5% after four consecutive advances ― the longest string of gains since March. The 4-week average is still up at +1.2%. 

The government share of purchase applications increased 0.5% in the week, pushing the public share of purchases to its highest level since February 1991. “For the month of August, the government-insured share of purchase applications was 40.4%, up from 38.3% in July and 31.7% in August 2008,” the report said. 

Mortgage rates vary across the country but the state average is just 5.17% ― an historically low rate ― in all 50 states. According to a report from Zillow.com published yesterday, lenders in Georgia offer the lowest rates with an average of 5.11%, while rates in Illinois are currently the highest at 5.32%.