Mortgage applications decreased 3.5% last week from a week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 29, 2016.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4% compared with the previous week. The Refinance Index decreased 4% from the previous week.

The seasonally adjusted Purchase Index decreased 2% from one week earlier to the lowest level since February 2016 while the seasonally adjusted Government Purchase Index fell to the lowest level since November 2015. The unadjusted Purchase Index decreased 2% compared with the previous week and was 6% higher than the same week one year ago.

The refinance share of mortgage activity decreased to 60.7% of total applications from 61.1% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 4.7% of total applications. The FHA share of total applications decreased to 9.4% from 10.1% the week prior. The VA share of total applications increased to 12.1% from 11.9% the week prior. The USDA share of total applications increased to 0.7% from 0.6% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.67% from 3.69%, with points decreasing to 0.30 from 0.36 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.65% from 3.67%, with points decreasing to 0.24 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.54% from 3.56%, with points decreasing to 0.32 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.93% from 2.94%, with points increasing to 0.36 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.90% from 2.96%, with points decreasing to 0.24 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.