Despite a drop in home mortgage interest rates, the total mortgage application volume decreased this month.

CNBC reports that the mortgage application volume for the week ending on July 10th dropped by 1.9%. The weeks are adjusted on a seasonal basis according to the Mortgage Bankers Association (MBA). The previous week caused somewhat of a “hiccup” due to the July 4th weekend, Chief Economist for the MBA Michael Fratantoni noted.

“Lenders did not take a uniform approach to the Saturday holiday, with some remaining open, while others closed. As a result, even with the adjustment, the weekly changes in the adjusted data have been more volatile in the past two weeks,” Fratantoni said.

Even though the volume of mortgage applications decreased from last week, mortgage refinancing applications actually increased by 4%, making up over 50% of total home mortgage applications that week. Still, applications to purchase a home fell by 8%.

Inversely, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances remained steady at 4.23%, with points increasing from 0.37 to 0.39 for 80% loan-to-value (LTV) loans.

“Interest rates dropped through the middle of last week, then jumped up on Friday, leaving the weekly average rate in our survey unchanged. However, the drop in the middle of the week did spur a small pickup in refinance activity, Fratantoni said.

Overall, this year has seen a gain in refinance and purchase volumes. The refinance volume is up by 5% and purchase volume is up by 17%.

Economists note a general trend of borrowers applying for adjustable rate loans rather than 30-year fixed deals. Adjustable rate loans ultimately have lower interest rates; however, they also have higher risks. Current interest rates for 30-year fixed mortgages stands at about 4%.

No matter what kind of interest rate a mortgage deal has, most real estate experts recommend that borrowers save up at least 3.5% of any mortgage deal for the down payment.