The volume of home loan applications submitted to lenders last week fell 1.4 percent compared to the week prior, according to the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA).
[IMAGE] [COLUMN_BREAK]Overall mortgage activity was marred by a drop in both refinance requests and home purchase applications.
MBA's refinance index decreased 0.9 percent from the previous week, which is the third straight weekly decrease. Refinances currently comprise more than 81 percent of total mortgage activity.
Borrower applications for a new mortgage to cover a home purchase declined 3.3 percent from one week earlier.
Mortgage demand slipped despite the fact that interest rates were cut.
MBA reported that the average contract interest rate for 30-year fixed-rate mortgages last week decreased to 4.44 percent, down from 4.47 percent.
The average contract interest rate for 15-year fixed-rate mortgages dropped from 3.96 percent to 3.88 percent. MBA says last week's 15-year rate is the lowest recorded in its survey, matching the rate from the week ending August 27, 2010.