The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning. It noted an increase of 1.4% in the group’s seasonally adjusted composite index, following a rise of 2.7% for the previous week. Mortgage loan rates decreased on all types of loans last week.

The seasonally adjusted purchase index decreased 0.4% from the prior week’s report. On an unadjusted basis, the composite index increased by 1% week-over-week. The unadjusted purchase index decreased by 2% for the week and remains 11% lower year-over-year.

Adjustable rate mortgage loans accounted for 7.8% of all applications.

The MBA’s refinance index increased by 3%, after rising by 4% in the previous week. The share of refinancings increased from 54% to 55% of all applications.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage dropped from 4.35% to 4.29%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.24% to 4.18%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.48% to 3.44%.

The contract interest rate for a 5/1 adjustable rate mortgage loan dropped from 3.24% to 3.10%. Rates on a 30-year FHA-backed fixed rate loan fell from 4.04% to 3.99%.

The MBA’s chief economist said:

Interest rates dropped last week as a result of the ongoing turmoil in Ukraine and other international concerns, which in turn pushed mortgage rates lower. Overall application volume for conventional mortgages increased. However, there was a 5.9 percent decline in the number of applications for government mortgages, with both purchase and refinance applications declining.

Earlier this week Fannie Mae slashed its home sales forecast for 2014 and 2015, and mortgage lenders may try to raise demand by lowering interest rates.

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