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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 2.9% in the group’s seasonally adjusted composite index for the week ending May 25. Mortgage loan rates fell last week on all five types of loans the MBA tracks.

Loan rates took a breather last week, and it has continued into this week largely due to the uncertainty around the political situation in Italy. The country will soon vote in an election that is widely seen as a referendum on Italy’s membership in the eurozone. If you thought Brexit was disruptive, imagine what will happen if the Italians decide to ditch the euro and go back to their own currency.

This is a big deal to bond traders. Demand for bonds shot up, and with the rise in demand, interest rates on mortgage-backed securities dropped and have continued dropping into this week.

On an unadjusted basis, the MBA’s composite index decreased by 4% week over week. The seasonally adjusted purchase index dropped by 2% compared with the week ended May 18. The unadjusted purchase index decreased by 3% for the week and is now 2% higher year over year.

The MBA’s refinance index decreased by 5% week over week, and the percentage of all new applications that were seeking refinancing dipped week over week from 35.7% to 35.3%, the lowest level since August 2008.

Adjustable rate mortgage loans accounted for 6.7% of all applications, down from 6.8% in the prior week.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.86% to 4.84%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.81% to 4.73%. The average interest rate for a 15-year fixed-rate mortgage dipped from 4.31% to 4.24%.

The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 4.12% to 4.11%. Rates on a 30-year FHA-backed fixed-rate loan jumped from 4.90% to 4.85%.