Home-mortgage applications rose last week despite rates being at their highest level in a month, as increased purchase activity made up for a decline in refinancings, the Mortgage Bankers Association said. 

The MBA’s Market Composite Index rose 0.8% in the week ended Aug. 28 compared to the previous week. The Refinance Index fell 1%, while the Purchase Index climbed 2%. 

“Mortgage rates reached their highest levels in four weeks as investors’ concerns about inflation and growing deficits push yields higher across the globe,” MBA Chief Economist Mike Fratantoni said. “Refinance volume dropped in response, but purchase volume increased modestly over the week and was slightly below last year’s level. In many local markets, potential buyers have plenty of homes to choose, and this is likely supporting transaction volume.” 

Fratantoni noted that the adjustable-rate mortgage share of activity hit a five-week high of 8%. The refinance share of activity, meanwhile, dipped from 42% to 41.8%. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less inched up to 6.79% from 6.78%.