Mortgage applications fell by 2.3% in the week ended May 15 after a 1.7% increase in the previous week, with both refinancing activity and new home applications being pulled lower by higher mortgage rates, according to Mortgage Bankers Association data released Wednesday.
Applications for refinancing loans fell by 0.1%, while new purchase applications declined by a seasonally adjusted 4%.
"Ongoing concerns around inflation from higher fuel costs combined with rising concerns over global public debt pushed Treasury yields higher in the US and abroad last week," said Joel Kan, MBA's vice president and deputy chief economist.
The average contract interest rate for 30-year fixed mortgages with loan balances of $832,750 or less rose to 6.56% from 6.46% in the previous week, the highest level in seven weeks according to MBA.
"Overall applications were down to the lowest level in five weeks as purchase borrowers pulled back across conventional and government loan types," Kan added. "Refinance applications were essentially unchanged, with a decline in government refinances and an increase in conventional refinancing, likely as the increase in rates came late in the week."