U.S. mortgage applications for both home purchase and refinancing loans dropped last week as
interest rates rose, an industry trade group said.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Jan.
19 skidded 8.4% to 611.3.
The drop in applications helps to unwind a 16.6% surge seen in the first week of the month, and brings the four-week moving average to an increase of 2.2%.
"The extreme weather this month (very mild in the early part and colder in the latter half) is likely playing havoc with this data," said Merrill Lynch economist David Rosenberg, in a research note.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.22%, edging up 0.03 percentage point from the previous week. Interest rates were also above year-ago levels of 6.04%.
The MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, slumped 8.4% to 402.7. The index was also sharply below its year-ago level of 473.7.
The group's seasonally adjusted index of refinancing applications decreased 9.6% to 1,848.8, its first drop in four weeks. A year earlier the index stood at 1,773.9.
The refinance share of applications decreased to 47.8% from 49.9% the previous week.
Fixed 15-year mortgage rates averaged 5.93%, up from 5.92%. Rates on one-year adjustable-rate mortgages (ARMs) rose to 5.91% from 5.85%.
The ARM share of activity fell to 20.3% from 21.2% the previous week.
The MBA's report precedes other data this week gauging the state of the U.S. housing market.
The National Association of Realtors will release data on sales of U.S. existing homes on Thursday. The Commerce Department will release data on sales of new homes on Friday.
The MBA's survey covers about 50% of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.