Mortgage applications decreased by 2.7% and fell for the sixth straight week as key interest rates fell slightly, according to the Mortgage Bankers Association.

"Treasury rates increased very slightly over the week, as the general sentiment was that inflation in April was not as strong as expected, despite a solid economic outlook," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.

The MBA's Weekly Mortgage Applications Survey for the week ending May 11 found that the refinance index decreased 4% from the previous week to its lowest level since August 2008. The refinance share of application activity decreased to 35.9% from 36.3% the previous week.

Mortgage applications slide

The seasonally adjusted purchase index decreased by 2% from one week earlier and the unadjusted purchase index decreased by 2% compared to the previous week and was 4% higher than the same week one year ago.

The market composite index decreased by 2.7% on a seasonally adjusted basis from one week earlier.

Adjustable-rate loan activity remained unchanged at 6.5% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 10.3% from 10.1% the week prior.

The share of applications for Veterans Affairs-guaranteed loans decreased to 10.3% from 10.4% and the U.S. Department of Agriculture/Rural Development share increased to 0.8% from 0.7% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased 1 basis point to 4.77%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 8 basis points to 4.73%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 2 basis points to 4.78%. For 15-year fixed-rate mortgages the average rate remained unchanged at 4.2%.

The average contract interest rate for 5/1 ARMs increased to its highest level in the history of the survey, 4.09%, from 4%.

Glenn McCullom

Glenn McCullom

Glenn McCullom is the copy editor of National Mortgage News.