Mortgage rates were flat but activity dropped again during the most recent week, as the housing market showed signs of its typical summer swoon.

The Mortgage Bankers Association's weekly survey showed a 4% decline in activity for the week.

The average interest rate for 30-year fixed-rate mortgages inched up to 5.96% from 5.95% a week ago, while the average on 15-year fixed-rate mortgages decreased two basis points, or 5.34%. The average rate for one-year adjustable rate mortgages, or ARMs, was unchanged at 3.93%.

The refinance share of all activity increased to 37.1% of total applications from 35.8%, reflecting the recent mini-rally in rates. The adjustable-rate mortgage share decreased a fraction to 31.3%.

Activity also slowed in the previous week, partly because of the Independence Day holiday, after a burst of activity that coincided with the Fed's long-awaited increase in short-term interest rates June 30. Activity usually slows ahead of Fed meetings.

For much of the late spring, consumers had rushed to lock in rates in previous months as mortgage rates rose in concert with the yield on the Treasury's 10-year note. But the yield on the benchmark note has fallen dramatically in recent weeks on repeated signs that the economic recovery is slowing. This trend may prompt the central bank to take a less aggressive approach in its monetary tightening cycle.

The mortgage market generally slows dramatically in the summer because few people choose to move at that time, especially after the busy spring season. Most families time their moves to avoid interrupting their children's school year.

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