After increasing slightly the previous week, mortgage application volume fell 4.7% on an adjusted basis during the week ended June 26, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume decreased 5% compared with the previous week.
Applications for refinances fell 5% while purchase volume decreased about 4%.
On an unadjusted basis, applications for purchases fell 5% compared with the previous week and were down 14% compared to the same week one year ago.
The refinance share of mortgage activity decreased to 48.9% of total applications, down from 49.0% the previous week.
The drop in volume came as mortgage interest rates hit new highs for the year: The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.26%, up from 4.19% to reach the highest level since October 2014.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.21%, up from 4.14% and also reaching its highest level since October.
The average rate for a 30-year FRM backed by the Federal Housing Administration was 4.04%, up from 3.96%.
The average rate for a 15-year FRM was 3.44%, up from 3.38%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.09%, up from 3.04%.
The ARM share of activity remained unchanged at 7.0% of total applications.
Looking at application volume by loan type, the FHA's share of total applications was 14.0%, up from 13.9% the week prior. The Veterans Affairs' share of total applications was 10.8%, down from 10.9% the week prior. The U.S. Department of Agriculture's share of total applications was 1.0%, up from 0.9%.