Applications for mortgages and refinances declined last week as rates increased, the Mortgage Bankers Association reported Wednesday.

The MBA's Market Composite Index, which measures mortgage application volume, fell 7.5% on a seasonally adjusted basis from the prior week. Unadjusted, the index decreased 7.2%.

The decline was led by the Refinance Index, which dropped 10.1%. The seasonally adjusted Purchase Index posted a smaller decline, down 1.7% from a week earlier. The unadjusted Purchase Index was down 1.5% week-to-week and off 21.9% from the comparable week last year.

"Treasury and mortgage rates increased towards the end of last week, as global markets calmed following the recent crises in Japan and the Middle East," said said Michael Fratantoni, vp/research and economics for the MBA. "Refinance volume predictably fell in response to these rate increases. As rates climb back to 5%, fewer homeowners have both the incentive and the ability to refinance. Purchase volume remained roughly flat as we enter what is typically the peak homebuying season."

The four-week moving average for the seasonally adjusted Market Index was up 2.0%; the four-week moving average was up 2.1% for the seasonally adjusted Purchase Index, while this average was up 2.0% for the Refinance Index.

The refinance share dropped to 64.3% of total applications from 66.4% the previous week, the second lowest refinance share reported since May 2010.The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% percent from 5.9%.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92% from 4.80%, with points decreasing to 0.83 from 0.96. The rate for 15-year fixed-rate mortgages increased to 4.16% from 4.02%, with points increasing to 0.99 from 0.90.