NEW YORK, May 20 (Reuters) – Applications for U.S. home mortgages fell last week as interest rates rose to their highest level since December 2014, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 1.5 percent in the week ended May 15.
The MBA’s seasonally adjusted index of refinancing applications rose 0.3 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 3.7 percent to the lowest level since April.
The refinance share of total mortgage activity rose to 52 percent of applications from 51 percent the week before.
Fixed 30-year mortgage rates averaged 4.04 percent in the week, the highest level since December 2014. They were up 4 basis points from 4.00 percent the previous week.
“Mortgage rates increased last week, and Treasury rates increased to a recent high at mid week before falling at the end of the week. Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased,” said Mike Fratantoni, MBA’s chief economist.
“The level of purchase applications remained 11 percent higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run-up in mortgage rates.”
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
(Reporting by Caroline Valetkevitch; Editing by Leslie Adler)