New applications for U.S. home mortgages increased last week, as purchase activity rose amid lower mortgage rates, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted market index of mortgage activity increased 3.4 percent to 696.2 in the week ended Dec. 3 from 673.3 one week earlier. That follows a 5.8 percent drop the previous week.
Fixed 30-year mortgage rates averaged 5.68 percent, excluding fees, last week, down 0.10 percentage point from 5.78 percent the prior week and 0.08 percentage point lower than a year ago, the Washington trade group said.
The association's purchase index, a gauge of loan requests for home purchases, climbed 6.6 percent to 490.9 from 460.3 the prior week -- the indexes' first increase in five weeks.
Treasury yields, which lenders use to set mortgage rates, dropped sharply last Friday after a softer-than-expected November payrolls report sent prices higher.
Despite the drop in yields, the report showed both declining refinance activity and a decrease of refinancing activity as a percentage of overall mortgage applications.
The MBA reported that its seasonally adjusted index of refinancing applications declined 1.1 percent to 1,890.6 from the previous week's 1,912.3. That comes on the heels of a 12.3 percent decline registered last week.
The refinance share of mortgage activity decreased to 45.6 percent of total applications from 46.4 percent the previous week.
Meanwhile, the adjustable-rate mortgage share of activity increased to 34.5 percent from 32.3 percent of total applications.