01:40 PM EDT, 05/21/2025 (MT Newswires) -- Mortgage applications in the US dropped last week as macroeconomic concerns pushed rates to the highest level since February, the Mortgage Bankers Association said Wednesday.

The market composite index, which measures loan application volume, fell 5.1% on a seasonally adjusted basis for the week ended Friday, following a 1.1% increase the week prior. Without adjustments, the index moved 5% lower.

The refinance index and the seasonally adjusted purchase index moved down 5% each from the week before, according to the report. The two indexes were up double digits from a year earlier.

"Mortgage rates jumped to their highest level since February last week, with investors concerned about rising inflation and the impact of increasing deficits and debt," said Mike Fratantoni, the association's chief economist. "Higher rates, including the 30-year fixed rate increasing to 6.92%, led to a slowdown across the board."

Official data released earlier this month showed that the US trade deficit reached a record level in March as imports surged to an all-time high. Companies rushed to front-loading inward shipments in anticipation of President Donald Trump's reciprocal tariffs that were announced in April before being put on hold for non-retaliating countries.

The US and China recently agreed to suspend most levies on each other's goods for 90 days, while Washington also reached a trade deal with the UK.

Last week's National Association of Home Builders and Wells Fargo data showed US homebuilder confidence unexpectedly fell in May, hitting the lowest since December 2022 amid heightened macro uncertainties.

The average interest rate for 30-year fixed-rate mortgages with balances of $806,500 or less climbed to 6.92% from 6.86% the week before, MBA data showed. For loan balances higher than that amount, the rate rose to 6.94% from 6.85%. For 15-year loans, the rate moved up to 6.21% from 6.12%.

The share of Federal Housing Administration loans, which are often used by first-time home buyers and can involve smaller down payments, increased to 17.9% from 17.4%.