Mortgage applications fell 1.6% last week from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. The decline was driven primarily by a 6% drop in the seasonally adjusted Purchase Index, which fell to its lowest level since February.

The Refinance Index increased 1% from the previous week. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 12% higher than the same week one year ago.

The refinance share of mortgage activity increased to 54.7% of total applications from 52.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5% of total applications.

The FHA share of total applications decreased to 12.6% from 13.0% the week prior. The VA share of total applications increased to 12.2% from 11.7% the week prior. The USDA share of total applications remained unchanged at 0.7% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 3.82%, with points unchanged at 0.34 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate was unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) remained unchanged at 3.74%, with points decreasing to 0.29 from 0.31 (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 3.63% from 3.64%, with points increasing to 0.28 from 0.25 (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 3.02% from 3.06%, with points increasing to 0.38 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.94% from 2.93%, with points increasing to 0.30 from 0.22 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

Separately, the MBA Builder Application Survey (BAS) data for April 2016 showed mortgage applications for new home purchases decreased by 11% relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

"The index decline in April is more than likely a result of both February and March seeing a strong surge in applications for new homes and the index not being seasonally adjusted," said Lynn Fisher, MBA's Vice President of Research and Economics. "In fact, last year peak applications occurred in March."

By product type, conventional loans composed 67.8% of loan applications, FHA loans composed 18.3%, RHS/USDA loans composed 0.6% and VA loans composed 13.3%. The average loan size of new homes decreased from $328,898 in March to $325,233 in April.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 503,000 units in April 2016, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for April is a decrease of 12.4% from the March pace of 574,000 units. On an unadjusted basis, MBA estimates that there were 48,000 new home sales in April 2016, a decrease of 11.1% from 54,000 new home sales in March.