Purchase applications for U.S. home mortgages rose last week, but refinancing activity plunged as interest rates jumped, an industry group said Wednesday.
Overall, the seasonally adjusted index of mortgage application activity fell 5.2 percent last week, the Mortgage Bankers Association said. The index includes both refinancing and home purchase demand.
"Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday," Michael Fratantoni, MBA's vice president of research and economics, said in a statement.
The MBA's seasonally adjusted index of refinancing applications tumbled 9.2 percent in the week ended July 1, while the gauge of loan requests for home purchases rose 4.8 percent.
It was the lowest level for the refinance index since early May. The refinance share of mortgage activity decreased to 66.4 percent of total applications from 69.5 percent the week before.
Fixed 30-year mortgage rates averaged 4.69 percent in the week, up from 4.46 percent the week before. (Reporting by Leah Schnurr; Editing by Leslie Adler)