According to the Freddie Mac Primary Mortgage Market Survey for the previous week, long term interest rates were down for the third week in a row. However, the Weekly Mortgage Market Survey released by the Mortgage Bankers Association reported quite the opposite results with rates up sharply from a week earlier.

According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) had an average interest rate of 6.63 percent with an average 0.4 point compared to 6.67 percent and 0.4 point the previous week. The 15-year FRM was down 4 basis points to 6.30 percent with points unchanged at 0.4.

The one-year Treasury-indexed hybrid ARM increased, moving from 5.65 percent to 5.71 percent with fees and points unchanged at 0.4.

"Long-term mortgage rates continued to move lower for a third consecutive week, in part reflecting a moderation in core inflation," said Frank Nothaft, Freddie Mac vice president and chief economist. "In the statement accompanying their decision to leave the target federal funds rate unchanged, the Fed noted that core inflation had declined recently, though a 'sustained' moderation is still to be seen, and signaled that inflation risk continues to figure prominently in their policy decisions."

"Helping to ease some inflation concerns, May's personal consumption expenditures report found that the core price measure had increased 1.9 percent for the year ending in May, within the 1 percent to 2 percent range with which the Fed is comfortable, and the lowest year-over-year rise in more than 3 years."

The MBA survey reported that the average contract interest rate for the 30-year FRM was up 15 basis points to 6.65 percent with points, including the origination fee, decreasing to 1.52 from 1.69.

The 15-year FRM had an average contract interest rate of 6.31 percent for the holiday shortened week, up from 6.20 percent for the week ended June 28. Points decreased to 1.41 from 1.43.

The interest rate for a one-year ARM increased to 5.60 from 5.49 percent with points decreasing to 1.16 from 1.17.

Mortgage application activity was down 19.1 percent on an unadjusted basis but when seasonally adjusted and with a special adjustment for the Independence Day holiday activity was up 1.1 percent from a week earlier. The year-over-year volume increased 25.3 percent.

Refinancing as a share of all mortgage application activity was down to 36.2 percent from 37.8 percent the previous week. Adjustable rate mortgages claimed a 20.4 percent share of applications compared to 21 percent one week earlier.