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While mortgage rates jump, applications decrease

Fewer people sought mortgage applications in the first week of February.

Fewer people sought mortgage applications in the first week of February.

Though February came in like a lion in the weather department for most Americans, it came in like a lamb in the real estate sector.

According to the Mortgage Bankers Association and its weekly mortgage applications survey, mortgage rates ticked up in the first week of February and fewer people applied for loans.

"Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated," said Michael Fratantoni, MBA's vice president of research and economics. "We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis."

The market composite index showed application volume decreasing 5.5 percent on a seasonally adjusted basis compared to the last week of January. The average contract interest rate for 30-year fixed rate mortgages increased to over 5 percent. Fifteen-year fixed-rate mortgages increased but only slightly, going from 4.13 percent two weeks ago to 4.29 percent last week.

People weren't moving as much over the past month either, as the four week moving average dropped 0.8 percent.

Though the first few months are usually slow in the moving market, the decline in moving activity may have also been due to the winter storms that blanketed most of the country.