The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey on Wednesday, which showed that home loan applications dropped to their lowest level since last November, as rising mortgage interest rates have led to an increase in borrowing costs.

For the week ending June 12, 2009, MBA reported that loan application volume fell 15.8 percent from the week before. However, compared to the same week last year, the number of mortgage apps is up 0.3 percent.
Applications both to purchase a home and to refinance a loan declined. MBA’s Purchase Index decreased 3.5 percent from one week earlier. The Refinance Index plummeted 23.3 percent. At the same time, the refinance share of mortgage activity decreased to just over half – 54.1 percent – of total applications.
Mortgage rates began rising in May from historic lows seen during the first part of the year. However, based on MBA’s market data, the average rates used in new contracts began to dip slightly last week.
Interest rates for 30-year fixed-rate mortgages (FRMs) decreased to 5.50 percent, down from 5.57 percent the week before. The 15-year FRM averaged 4.99 percent last week, compared to the previous week’s 5.10 percent. The 1-year adjustable-rate mortgage (ARM) also dropped to 6.54 percent, down from 6.75 percent.