US Mortgage Applications Up Despite Rates Reaching 4-Month High

US mortgage applications increased last week despite mortgage rates climbing to their highest level in four months, according to a Mortgage Bankers Association (MBA) report released Wednesday.

The market composite index, a measure of mortgage loan application volume, rose 3.3% on a seasonally adjusted basis for the week ending April 12. On an unadjusted basis, the index increased 4% compared with the previous week.

"Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down," Joel Kan, MBA's vice president and deputy chief economist, said in a statement.

The average contract interest rate for a 30-year fixed mortgage rate increased to 7.13% last week, reaching its highest level since December, from 7.01% the previous week.

The average contract interest rate for 15-year fixed-rate mortgages, meanwhile, rose to 6.64% from 6.46%.

"Despite these higher rates, application activity picked up, possibly as some borrowers decided to act in case rates continue to rise," said Kan.

The MBA survey covers more than 75% of US retail residential mortgage applications. -