Mortgage applications last week dropped 10 percent after rates soared to their highest level since March, the Mortgage Bankers Association reported in its weekly mortgage market survey for the week ending May 17.
The refinance index-which reflects applications for refinancing-fell 12 percent last week, while applications for home purchases dropped 3 percent. Still, applications for home purchases-viewed as a leading indicator of future home sales-were still 10 percent above levels for the same week a year earlier, MBA reported.
A rise in mortgage rates last week led to the largest single-week drop in refinance applications this year, said Mike Fratantoni, MBA's vice president of research and economics. The refinance index has dropped nearly 19 percent over the past two weeks. It is at its lowest level since late March.
MBA reports that the average 30-year fixed-rate mortgages rose to 3.78 percent last week, from 3.67 percent the prior week. Also, the average 15-year fixed-rate mortgage rose to 2.96 percent from 2.88 percent a week earlier, MBA reports.