Application Volume Falls as Rates Hit 7-Month High

Rising interest rates brought down mortgage activity last week, according to the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA).

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The group released its Weekly Mortgage Applications Survey for the week ending March 8, revealing a 4.7 percent decline in loan application volume from the prior week. On an unadjusted basis, volume was down 4 percent.

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According to MBA, much of that drop is attributable to a fall-off in the Refinance Index, which decreased 5 percent from the previous week. The refinance share of mortgage activity fell to 76 percent of total applications, its lowest level since May 2012.

""The announcement of stronger than anticipated job growth last week led to an increase in interest rates, with the 30 year fixed mortgage rate in our survey reaching the highest level in more than six months,"" said Mike Fratantoni, MBA's VP of research and economics.

While refinance volume was down week-over-week, Fratantoni noted that it remains high given the steady flow of applications under the Home Affordable Refinance Program (HARP).

Meanwhile, the seasonally adjusted Purchase Index also declined, falling 3 percent from the previous week. The unadjusted index fell 1 percent and was 9 percent higher than the same week one year ago.

The average interest rate for a 30-year fixed-rate mortgage increased 11 basis points to 3.81 percent last week--its highest rate since August 2012, MBA reported.