The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) reported Wednesday that mortgage applications for refinancing dropped 21.6 percent for the week ending November 26, as interest rates continued to head upward.
It marked the third weekly decrease for the refinance index, which has hit its lowest level since June 2010.
[IMAGE] [COLUMN_BREAK]With refinances making up nearly three-quarters of total applications, their decline pushed MBA's composite index of total home loan application volume down 16.5 percent from one week earlier. The trade group's data included an adjustment to account for the Thanksgiving holiday last week.
MBA's measurement of loan applications for home purchases rose 1.1 percent from one week earlier and is at its highest level since the beginning of May 2010. The purchase index is 2.7 percent higher than the same week one year ago.
The analysts at MBA attributed the steep drop in refinances to yet another rise in long-term interest rates, which have increased four times in the last five weeks.
According to MBA's market data, the average contract interest rate for 30-year fixed-rate mortgages increased to 4.56 percent last week, up from 4.50 percent the week prior and hitting its highest mark since August. The average contract rate for 15-year fixed mortgages rose from 3.83 percent to 3.91 percent last week.