A surge in mortgage rates to the highest level in two years dampened demand for mortgage applications last week, the Mortgage Bankers Association reports in its weekly survey covering 75 percent of the residential mortgage market. 

For the ninth consecutive week, 30-year fixed-rate mortgages rose, averaging 4.68 percent for the week ending July 5. It was the highest average since July 2011. However, rates still remain low by historical averages. 

During the week, loan requests for home purchases dropped 3.1 percent, the second consecutive week posting declines, the MBA reports. Meanwhile, refinancing applications dropped 4.4 percent last week. Overall, the MBA’s index of mortgage application activity -- which includes refinancing and home purchase demand -- dropped 4 percent. 

Source: Reuters