Mortgage application activity fell 5.1% in the holiday-shortened week ending July 8 with both refinancing and purchase activity lower.

The Refinance Index declined a seasonally adjusted 6.2% to ~2220, its fourth straight decrease, with the index at its lowest level since mid-April.

As a percent of total application activity, refinancing share was 65.6%, down from 66.4% in the previous week. Meanwhile, the Purchase Index slipped 2.6% to ~184.

The slowing in activity came on a slight improvement in mortgage rates with the average contract interest rate for 30-year fixed mortgages dropping 14 basis points to 4.55%.

Rates, however, are too high for 4.5% coupons to refinance, while borrowers underlying the 5% coupon have already had several opportunities to refinance. This explains the lackluster response.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.