Renewed hope for Europe and the U.S. economy helped interest rates reach their highest peak since December and drove down mortgage applications by 7.4 percent last week.[IMAGE]
The ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA) found in a weekly survey that application volume declined by 7.1 percent on a seasonally unadjusted basis from the week earlier.
The refinance share of mortgage activity fell to 73.4 percent of total volume, the lowest figure since July last year. The Refinance Index saw declines by 9.3 percent and 4.31 percent for the[COLUMN_BREAK]
four-week moving average, respectively.
""With the rate increase this week, refinances are obviously slowing, and the refinance share at 73% is down to its lowest level since last July,"" ""Jay Brinkmann"":http://www.mbaa.org/AboutMBA/GovernanceandManagement/Management/JayBrinkmann.htm, MBA's SVP of research and education, said in a statement.
He added that ""HARP will be a bigger percentage of refinances but will be more concentrated in certain states.""
The seasonally adjusted Market Index yielded a 2.79-percent decline for the four-week moving average and 3.25 percent for the Purchase Index.
The adjustable-rate mortgage (ARM) share of activity meanwhile fell to 5.6 percent from 5.8 percent of application volume from last week.
The MBA said that the Purchase Index fielded 1-percent declines from the week before, while it slid 0.6 percent on a seasonally unadjusted basis.
Experts say investors continue a slow return to sovereign bonds in Europe as the second bailout slowly adjusts in Greece, contracting Treasury yields and releasing downward pressure on interest rates in the United States.