A rebound in mortgage rates caused refinancing applications, as measured by the Mortgage Bankers Association's index, to fall 12% last week after surging by a quarter the week before, the trade group said Thursday.

Orawin Velz, the MBA's vice president of forecasting, said borrowers pulled back because the average 30-year fixed mortgage rate increased 35 basis points, to 5.24%. "Refinance activity is very sensitive to rates, and at 5% some borrowers are waiting," she said.

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