Overall mortgage application volume dropped last week amid rising interest rates, the Mortgage Bankers Association reported today.

The market composite index, a measure of home loan application volume, fell 2.7 percent last week, down to 672.1 on a seasonally adjusted basis from 690.5 the week before.

The index that tracks refinancings posted the largest decline, down 4.5 percent from the previous week, while the purchase index dipped 0.9 percent.

Both the refinancing and adjustable-rate mortgage (ARM) shares of mortgage activity sank last week, with refis dropping to a 45.3 percent share of the market and ARMs down to a 20.9 percent share.

Borrowing costs across all loan types were up last week, as the average contract interest rate on the 30-year fixed-rate mortgage rose to 6.06 percent, the 15-year fixed rate gained to 5.79 percent, and the one-year ARM rate increased to 5.88 percent.

Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.3 on the 30-year loans, 1.17 on the 15-year, and 0.73 on 1-year ARMs. Statistics, which include the origination fee, are based on loan-to-value ratios of 80 percent.

The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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