Week to Week Mortgage Applications Fall- Higher rates dampen interest in refinancing

With interest rates pressing higher, refinancing applications dropped 11.8% in the week ended June 5, while applications for mortgages to purchase home rose a seasonally adjusted 1.1%, according to the Washington-based MBA's weekly survey, which encompasses half of all U.S. retail residential mortgage applications.

Total application volume was still up an unadjusted 7.6% compared with the same week in 2008. The seasonally adjusted four-week moving average for all mortgages was down 8.7%.

Overall, mortgage filings as tracked by the MBA had dropped 16.2% on a seasonally adjusted basis in the week ended May 29 from a week earlier, also paced by lower refinancing activity. See full story.

As in the previous week, interest rates charged for home loans moved sharply higher.

The rate on 30-year fixed-rate mortgages averaged 5.57% last week, up from 5.25% for the final week of May, while the average for 15-year fixed-rate mortgages climbed to 5.10%, up from 4.80%. And for one-year adjustable-rate mortgages, the average stood at 6.75%, up from 6.61%.

To obtain the rates, the 30-year mortgage required payment of an average 1.09 point, the 15-year mortgage had an average 1.04 point and the 1-year ARM required an average 0.10 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Refinancings made up 59.4% of all applications filed last week, down from 62.4% the previous week, the MBA said. Adjustable-rate mortgages accounted for 3.4%, up 3.0%.

-Market Watch