Freddie Mac reported today that 30-year fixed mortgage rates averaged 5.32% with an average 0.7 point for the week ending July 2.

This is down 10 basis points from the previous week. The no point rate is closer to 5.5%.

The improvement in mortgage rates might stimulate mortgage application activity for this week, although the July 4 holiday could be offsett this effect to some extent.

Yesterday, the Mortagage Bankers Association reported both refinancing and purchasing activity declined in the week ending June 26 as borrowers are less responsive to mortgage rates closer to 5.5% versus 5%, on top of higher closing costs.

The Refinance Index dropped 30% to 1458, its lowest level since last November, while the Purchase Index slipped 3.5% to 361.

Freddie Mac also reported 15-year fixed mortgage rates fell 10 basis points to 4.77% and 5/1 hybrid ARM rates declined to 4.88% from 4.99% previously.

Meanwhile, one-year ARM rates rose one basis point to 4.94%.

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