Despite a 14 basis point drop in the average fixed interest rate for 30-year mortgages, mortgage activity fell 0.7% on a seasonally adjusted basis last week, driven by a 4% drop in purchase-only loans, the Mortgage Bankers Assn. said Wednesday.

The Refinance Index increased 0.9% to its highest level since December. The drop in the Purchase Index put it 15.5% below the comparable week last year.

On an unadjusted basis, the MBA's Market Composite Index decreased 0.5% and the unadjusted Purchase Index fell 3.2%. The four-week moving average for the seasonally adjusted Market Index was up 4.9%; for the Purchase Index, it was up 1.6%; and for the Refinance Index it was up 6.6%.

The refinance share rose to 66.4% of total applications from 65.5% the previous week, and the adjustable-rate mortgage share dropped to 5.6% from 6.0%.

The average rate for 30-year fixed-rate mortgages fell to 4.79% from 4.93%, with points increasing to 1.07 from 0.87, a low since the second week of January. The rate for 15-year loans dropped to 4.03% from 4.17%, with points decreasing to 0.85 from 1.15. This was a new low for the rate since early December.