Refinance applications hit 7-month low

Mortgage applications to buy homes continued to rise last week, as refinance applications hit the lowest level in seven months.

An index tracking applications to purchase homes increased 2 percent week over week, seasonally adjusted, according to the Mortgage Bankers Association. The uptick comes despite historically low levels of housing inventory and skyrocketing home prices.

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“Activity was up 5 percent from a year ago, as the recovering job market and demographic factors drive demand,” Joel Kan, head of industry forecasting, said in a statement.

MBA’s index tracking refinance applications dropped 4 percent last week — the lowest level since September. Kan attributed that to increasing rates.

“Rates have jumped 36 basis points since the end of January,” he said.

The average rate for a 30-year, fixed-rate mortgage was 3.28 percent, up 2 basis points from 3.26 percent. The average rate for jumbo loans was flat at 3.34 percent.

The average purchase loan size last week was $406,200, down from $409,900 the week before.

MBA’s indices cover 75 percent of the residential mortgage market on a weekly basis. The report has been running since 1990.