The association said mortgage activity fell 11.5 percent in the week while refinancing activity dropped 15 percent in the week ending Friday.
Refinancing declined as a share of mortgage activity, as well, dropping to 68 percent from 71 percent in the previous week. It was the fourth consecutive week that refinancing dropped as a share of long-term lending.
Interest rates for 30-year, fixed-rate conforming mortgages increased from 3.9 percent to 4.07 percent during the week, the highest rate since April 2012.
Points for 30-year conforming loans fell from 0.39 to 0.35.
The average interest rate for 30-year contracts on jumbo loans -- larger than $417,500 -- rose from 4.07 percent to 4.2 percent, the highest level since May 2012, with points climbing marginally from 0.27 to 0.28.
Interest rates for 15-year, fixed-rate mortgages rose from 3.1 percent to 3.23 percent, the highest level since June 2012. Points for 15-year, fixed-rate contracts rose from 0.3 to 0.38.
The average rate for 30-year loans backed by the Federal Housing Administration rose from 3.62 percent to 3.76 percent, a 12-month high, with points rising from 0.27 to 0.32.
The average rate for short-term, adjustable-rate mortgages rose from 2.6 percent to 2.76. Points for short-term adjustable-rate loans rose from 0.24 to 0.41, the MBA said.
Notable deaths of 2014 [PHOTOS]