Mortgage applications dipped as key interest rates grew to their highest level in five and a half years, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.
The Market Composite Index declined 0.2% on a seasonally adjusted basis for the week ending April 20.
While the Refinance Index fell 0.3% from the week prior, the refinance share of mortgage activity decreased from 37.6% to its lowest level since September 2008 — 37.2%.
The seasonally adjusted Purchase Index held steady from the previous week.
"Treasury rates increased significantly last week, partly driven by the market's reaction to more hawkish comments from key Fed officials and positive economic news on strong retail sales and declining jobless claims," Joel Kan, MBA associate vice president of economic and industry forecasting, said in a press release.
"The conventional purchase index increased to its highest level since January 2009. Applications for government purchase applications, loans more likely to be used by first-time buyers, declined for the week," he said.
The share of applications for Federal Housing Administration loans declined from 10.6% to 10.2% from the previous week, while the share of U.S. Department of Veterans Affairs loan applications decreased from 10.4% to 10.1%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) grew from 4.66% to 4.73%, its highest level since September 2013. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (over $453,100) rose from 4.53% to 4.64%, its highest level since January 2014.
For 15-year fixed-rate mortgages, the average contract interest rate reached its highest level since April 2011, growing from 4.08% to 4.13%. Also marking a level not seen since 2011, the average contract interest rate for 5/1 adjustable-rate mortgages increased from 3.94% to 3.98%, its highest level since February 2011.