May 15, 2013 / 11:06 AM / in 4 years

Mortgage applications drop as rates rise: MBA

NEW YORK (Reuters) - Applications for home mortgages fell last week for the first time in more than a month as interest rates jumped, sapping demand for refinancing, an industry group said on Wednesday.

A sign near the Trades housing division built by Gentry Homes promotes special offers for potential buyers in Ewa Beach, Hawaii, March 6, 2013. REUTERS/Hugh Gentry

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 7.3 percent in the week ended May 10.

The index of refinancing applications tumbled 8.1 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, lost 4.1 percent.

The refinance share of total mortgage activity held steady at 76 percent of applications.

Fixed 30-year mortgage rates rose to the highest level since the beginning of April, up 8 basis points to average 3.67 percent.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Reporting by Leah Schnurr; Editing by Diane Craft

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