Updated from 9:19 a.m. EDT

Applications for new mortgages and the refinancing of existing ones dipped in the week ended June 25, as interest rates stood still ahead of a widely anticipated 25-basis-point hike in the


benchmark rate Thursday.

The Mortgage Bankers Association, a trade group, said total applications dropped 4.4% in the past week on a seasonally adjusted basis. New mortgage applications dropped by 4.2%, while refinancing activity fell 4.7%.

The decline ended two weeks of increased activity as homeowners and purchasers chased the waning days of low rates.

"If the market stays still, then people believe that things will get better," said Jerry Grad, manager of the Atlanta office of Allied Home Mortgage.

A 30-year fixed rate mortgage averaged 6.21% nationwide, the same as last week. The average rate on a 15-year, fixed-rate mortgage remained at 5.61%. The 30-year rate was at 6.34% on June 18, and the 15-year rate was at 5.73% during the same period.

But the average rate on one-year adjustable-rate mortgages, or ARMs, rose to 4.18%, from 4.10% a week earlier, reflecting their close connection to short-term rates. Longer-term interest rates are more directly related to the yield on the Treasury's 10-year bond, which has risen about 125 basis points from its March low.

Rates a year ago were 6.24% for a 30-year mortgage and 5.64% for a 15-year mortgage, according to

Freddie Mac

. The last time national rates for the 30-year and 15-year mortgages were static for two consecutive weeks was in March of 2002, according to the MBA.

Grad said the central bank has spent considerable time and effort signaling its plans for a 25-basis-point hike and the market has already factored that in.

"Nobody's expecting any miracles," he said. "I just can't picture any major movement one way or the other."

Refinancing remained at 33.4% of total applications from week-ago levels. The share of ARMs, increased to 33.9% of total applications from 33.5% the previous week.