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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 2.3% in the group’s seasonally adjusted composite index for the week ending February 3. During the week, mortgage loan rates decreased on all types of fixed-rate loans and increased on adjustable rate mortgages.

On an unadjusted basis, the composite index increased by 6% week over week. The seasonally adjusted purchase index decreased by 2% compared with the week ended January 27. The unadjusted purchase index increased by 9% for the week and is now 4% higher year over year.

The MBA’s refinance index increased by 2% week over week, and the percentage of all new applications that were seeking refinancing slipped from 49.4% to 47.9%, its lowest level since June of 2009.

Adjustable rate mortgage loans accounted for 6.9% of all applications, up from 6.4% the prior week.

After an early morning rise on Tuesday, equities slipped lower for most of the day. Matthew Graham at Mortgage News Daily explains what that means for mortgage rates:

[S]lumping stocks and falling rates speak to the same underlying trends.  Caution, fear, and the like, tend to increase demand for less risky assets like bonds.  As demand for bonds increases (sometimes, at the expense of stocks–like today), rates fall.

In and of itself, today’s improvement was mild to moderate.  But taken together with yesterday, the gains were more meaningful as they brought a majority of lenders back to quoting 30yr fixed rates of 4.125% on top tier scenarios.  The transition from 4.25% is still very much “in progress,” however.  More than a few lenders continue quoting 4.25%, but with slightly lower upfront costs vs yesterday.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.39% to 4.35%. The rate for a jumbo 30-year fixed-rate mortgage dipped from 4.32% to 4.27%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.61% to 3.55%.

The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.33% to 3.39%. Rates on a 30-year FHA-backed fixed-rate loan slipped from 4.17% to 4.16%.