Mortgage applications decreased 2.9%, falling for the eighth consecutive week even as interest rates came down from their recent highs, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending May 25 found that the refinance index reached its lowest level in 18 years, decreasing 5% from the previous week. The refinance share of application activity decreased to 35.3% from 35.7% from the previous week.

"Rates slipped slightly over the week as concerns over U.S. trade policy and global growth sent some investors back to safer U.S. Treasuries," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.

Mortgage apps fall

"Minutes from the most recent Federal Open Market Committee meeting also yielded a more dovish tone, which added to the downward pressure in rates. Our 30-year fixed mortgage rate decreased two basis points over the week to 4.84% as a result. Both purchase and refinance activity decreased despite the drop in rates, part of which was due to slowing activity before the Memorial Day holiday."

The seasonally adjusted purchase index decreased 2% from one week earlier and the unadjusted purchase index decreased 3% compared with the previous week and was 2% higher than the same week one year ago.

Adjustable-rate loan activity decreased to 6.7% from 6.8% of total applications, while the share of Federal Housing Administration-guaranteed loans decreased to 9.9% from 10.3% from the week prior.

The share of applications for Veterans Affairs-guaranteed loans increased to 9.9% from 9.8% and the U.S. Department of Agriculture/Rural Development share remained unchanged at 0.8% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased 2 basis points to 4.84%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate decreased 8 basis points to 4.73%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 5 basis points to 4.85%. For 15-year fixed-rate mortgages the average rate decreased 7 basis points to 4.24%.

The average contract interest rate for 5/1 ARMs decreased 1 basis point to 4.11%.