Average 30-year fixed mortgage dips to 4.3%

• Mortgage rates dipped to 4.29%25 down%2C from 4.46%25 a week ago
• Average nationwide rate for fixed 15-year mortgage falls to 3.39%25
• If home buying%2C refinancing rates continue to fall%2C housing rebound will continue

Average fixed-rate mortgages nationwide fell the week ended July 3 as home buying and refinancing demand slumped and a recent spike in market rates subsided.

The average rate on a 30-year fixed mortgage nationwide dipped to 4.29% after hitting a two-year high of 4.46% a week earlier, according to Freddie Mac's weekly survey of USA lenders.

The week ended June 27, average 30-year fixed mortgages jumped from just below 4% to nearly 4.5%, the biggest one-week jump since 1987, home loan Freddie Mac said.

Driving mortgage rates lower: Mortgage applications slumped 11.7% the week ended July 3, according to a Mortgage Bankers Association survey of lenders. And refinancing applications sank 16% week over week, hitting the lowest level since July 2011.

"At these rates, many fewer homeowners have an incentive to refinance, and refinance application volume declined more than 15%," said Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

Still, mortgage rates remain low by historical standards. And if the one-week dip continues, a rebound in the housing market, which has been crucial to improving economic growth this year, could get a boost.

Mortgage rates will also be helped if a market rates, which subsided this week after spiking the final two weeks of June, hold steady or continue falling. The bellwether 10-year Treasury note yield was trading at 2.47% Wednesday after hitting a 22-month high of 2.66% in late June.

The average rate on the 15-year fixed mortgage fell to 3.39% from 3.5% a week ago. The same week a year ago, the rate on the 30-year fixed mortgage was 3.62% and the 15-year fixed mortgage was 2.89%