MCLEAN, Va. - Refinance loans dropped to 15% of conventional mortgage applications in the second quarter from 20% in the previous quarter and 36% in the year-earlier period, Freddie Mac said Monday.

Vassilis Lekkas, Freddie's principal economist, said that rates of 8.25% for fixed-rate mortgages have kept refinancings moderate in the first half, but he added that the recent decrease in the mortgage rate to about 8% could give refinancings a lift in the third quarter.

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