Mortgage Applications Fall as Rates Rise to Highest Level in Month

Mortgage applications decreased 0.5 percent from one week earlier as interest rates rose.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.5 percent on a seasonally adjusted basis from one week earlier.

The refinance share of mortgage activity decreased to 50.8 percent of total applications from 52.1 percent the previous week, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 22, 2017.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.11 percent from 4.04 percent.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.38 percent from 3.35 percent.

"Mortgage rates increased to their highest levels in almost a month following a relatively hawkish Fed statement last week, driving the decline in refinance activity," Joel Kan an MBA economist, told CNBC.com. "The FOMC announced the start of its plan to reduce the size of its balance sheet and indicated plans to increase short-term rates one more time this year."

Mortgage applications to purchase a home, which are less sensitive to weekly rate moves, increased 3 percent for the week and are 4 percent higher than the same week one year ago.

"Purchase applications increased slightly last week, but were still weighed down by tight inventories of homes for sale and lingering effects from the hurricanes," Kan said.

(Newsmax wire services contributed to this report).