Mortgage applications fell by 2.9% in the week ended July 31 as 30-year fixed mortgage rates rose to their highest level in more than a year after the Federal Open Market Committee's meeting last week, according to Mortgage Bankers Association data released Wednesday.
This follows a 6.4% decrease in overall activity in the week ended July 24.
Applications for refinancing loans fell by 2%, while new purchase applications declined by a seasonally adjusted 4%.
The average contract interest rate for 30-year fixed mortgages with loan balances of $832,750 or less rose to 6.81% from 6.76% in the previous week.
"Application volume for both refinance and purchase loans declined for the week, and are now running behind last year's pace, indicating that higher mortgage rates have weakened overall demand," said Mike Fratantoni, MBA's senior vice president and chief economist.