WASHINGTON ( TheStreet) -- Mortgage applications dropped 12.9% last week as mortgage rates edged higher. The volume of mortgage loan applications fell 12.9% on a seasonally adjusted basis in the week ending Jan. 21, the Mortgage Bankers Association said Wednesday. Mortgage activity rose 5% in the prior week .
Refinancing application volume dropped 15.3% from the previous week, following a 7.7% increase in the prior week, to its lowest level since Jan. 2010. Home-purchase loan applications decreased 8.7% week-over-week to its lowest level since October. On an unadjusted basis, the MBA's purchase index was 20.8% lower than in the year-earlier week. A total of 70.3% of all loan applications last week were for refinancing existing mortgages, down from a 73% share in the prior week. The average rate on a 30-year fixed mortgage edged higher to 4.8%, from 4.77% in the prior week, following three consecutive weeks of declining rates. While the housing market remains sluggish and is unlikely to materially improve in the near future, there are some signs of future recovery.