John Varano

According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell last week across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. The drop in rates was caused by a number of economic factors and led to rates falling to the lowest level in a month. However, despite the decline, demand for mortgage applications was relatively flat from one week earlier. Michael Fratantoni, MBA's chief economist, told CNBC part of the reason the drop in rates didn't boost demand is because the number of borrowers who have yet to refinance their loans continues to shrink. “As the number of borrowers who could still benefit from a refinance continues to decline, it will take larger and larger rate drops to make a significant impact on refinancing volume,” Fratantoni said. As for purchase demand, it was 8 percent higher than at the same time last year. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.