Home Loan Applications Drop; Mortgage Rates Up

Applications for home loans dipped last week as mortgage rates ticked up slightly from the lowest level in decades.

The Mortgage Bankers Association says overall applications fell 1.5 percent from a week earlier. Applications to refinance home loans fell 3.1 percent, the first drop in six weeks. Those taken out to purchase homes, however, rose 6.3 percent to the highest level since May. The numbers are adjusted for seasonal factors.

Applications to refinance loans made up about 82 percent of all home loan activity, down from nearly 83 percent a week earlier.

Rates have been at or near the lowest level in decades since spring as investors have shifted money into safer Treasury bonds. That has lowered their yields, which mortgage rates tend to track.

The average rate for a 30-year fixed loan rose to 4.5 percent from 4.43 percent a week earlier. Rates on the 15-year fixed-rate mortgage, a common refinancing option, increased to 4 percent from 3.88 percent.

The Mortgage Bankers Association's survey covers more than 50 percent of all applications nationwide.