Mortgage application activity eased 1.3% in the week ending May 25 with both refinancing and purchase activity lower.

According to the Mortgage Bankers Association (MBA), the Refinance Index fell 1.5% to ~4388 refinancing share as a percent of total application activity holding at 76.6% while the Purchase Index slipped 0.6% to 186.

The declines came despite new lows reached in mortgage rates with the contract interest rate for 30-year conforming fixed rate loans averaging 3.91% from 3.93% and Federal Housing Administration rates falling three basis points to 3.70%.

Possibly contributing to the decline was the Memorial Day weekend; the MBA noted that the data was not adjusted for early closings on Friday.

However, refinancing activity is showing less response to the new lows in mortgage rates.

After surging 13% for the week ending May 11 as rates fell to a record low 3.83% based on Freddie Mac's weekly survey, activity rose just 5.6% in the following week as the 30-year fixed rate fell to 3.79%.

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