US mortgage applications fall as rates rise 1st time in 4 weeks

US mortgage applications decreased last week, as mortgage rates rose for the first time in four weeks, according to a Mortgage Bankers Association (MBA) report released Wednesday.

The market composite index, a measure of mortgage loan application volume, declined 5.7% on a seasonally adjusted basis for the week ending May 24. On an unadjusted basis, the index decreased 6.3% compared to the previous week.

"Mortgage rates increased for the first time in four weeks," Joel Kan, MBA's vice president and deputy chief economist, said in a statement. "The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend."

"Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year's levels. There continues to be limited levels of existing homes for sale and many buyers are struggling to find listings in their price range that meet their needs," he added.

The average contract interest rate for 30-year fixed-rate mortgages rose to 7.05%, from 7.01% the previous week when it recorded its lowest level in seven weeks.

The rate for 15-year fixed-rate mortgages, meanwhile, increased to 6.66% from 6.42% during that period.

The MBA survey covers more than 75% of US retail residential mortgage applications.