Mortgage loan application volume decreased 5.2% on a seasonally adjusted basis last week from the prior week, the Mortgage Bankers Association said early Wednesday.
The refinance index dropped 9.2% week over week as loan rates rose. It was the third consecutive weekly decline for refinance activity, reaching its lowest level since May 6.
The seasonally adjusted purchase index increased 4.8% from the prior week, while the unadjusted purchase index increased 4.4% from the previous week and was 11.7% higher than in the year-earlier week. "Stronger economic data towards the end of the week coupled with the end of the Fed's second round of quantitative easing helped bring mortgage rates to their highest level in over a month," said Michael Fratantoni, MBA's vice president of research and economics. "Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday." A total of 66.4% of all loan applications last week were for refinancing existing mortgages, down from 69.5% in the prior week. The average rate on a 30-year fixed mortgage pushed up to 4.69% in the week ended July 1, up from 4.46% in the prior week, higher though remaining well below the psychological benchmark of 5%. Last week's rates were the highest since the middle of May.