Mortgage rates dipped last week

Mortgage rates drop.

After previously reaching a 2015 high, mortgage rates dipped slightly last week, resulting in a week over week increase of mortgage applications, according to the latest report from the Mortgage Bankers Association (MBA).

Rates in all major mortgage loan categories fell last week. The average rate for a 30 year fixed rate mortgage decreased from 4.26 percent to 4.23 percent. The rate for a 30 year fixed rate mortgage on home values over $417,000 fell to 4.18 percent from 4.23 percent. Rates for an average 15 year fixed rate mortgage dropped from 3.44 percent to 3.41 percent.

Average interest rates for a 5/1 adjustable rate mortgage loan dropped to 3.03 percent from 3.09 percent. Rates for FHA backed 30 year fixed rate mortgages stayed just above 4 percent at 4.01 percent, falling from 4.04 percent in the previous week.

Thanks to the dropping rates, the MBA reported that mortgage applications rose by 4.6 percent from the previous week on a seasonally adjusted basis (which accounts for the Fourth of July holiday).

Seasonally adjusted purchase applications rose by 7 percent. Unadjusted, purchases showed a 32 percent increase from the same week in 2014. Applications to refinance increased 3 percent week over week, but the over all share of refinancing applications dropped to 48 percent from 48.9 percent, the lowest since June of 2009.

"Overall, trends in mortgage applications last week were consistent with the ongoing shift towards a purchase market accompanied by growth in employment and higher interest rates," Lynn Fisher, MBA vice president of research and economics, told CNBC.

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