New applications for U.S. mortgages fell last week after rising for two straight weeks, as interest rates on the 30-year mortgages were unchanged, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted market index, a measure of mortgage activity, fell for the week ending June 25 by 4.4 percent to 575 from the previous week's 601.2.
The Washington trade group's purchase index, a gauge of new loan requests for home purchases, fell last week by 4.2 percent to 435.4 from 454.5 in the prior week.
While the purchase index declined in the June 25 week, it is still running at a historically high level, reflecting strength in the U.S. housing market.
Sales of new homes in May jumped 14.8 percent, their biggest monthly rise since April 1993, to a record annual rate of 1.369 million units, the Commerce Department said last week.
Sales of previously owned homes in May rose unexpectedly by 2.6 percent last month to a record annualized rate of 6.8 million units, the National Association of Realtors said last week.
However, the recent rise in rates has curbed refinancing activity, which hit a record high in 2003. The mortgage group's refinancing index for last week fell to its lowest level since 1,320.6 for the week ending April 19, 2002.
The Washington trade group's seasonally adjusted refinancing index decreased by 4.7 percent to 1,386.9 from previous week's 1,454.6.
Thirty-year mortgage rates, excluding fees, averaged 6.21 percent, unchanged from the previous week. Last week's average 30-year rates were up 0.98 percentage points from the comparable week a year ago.
But interest rates on adjustable-rate loans continued to rise. The popularity of variable-rate mortgages, especially hybrid loans, has exploded in recent months because their interest rates could run much as 2 percentage points below those on traditional 30-year products.
Last week, rates on one-year adjustable mortgages averaged 4.18 percent, up 0.08 percentage point from the prior week and 1.07 percentage point from a year earlier.