Applications for U.S. home mortgages eased last week amid weaker refinancings and purchases despite a dip in 30-year mortgage rates, the Mortgage Bankers Association said on Wednesday.

Overall, the Mortgage Bankers Association (search) said its seasonally adjusted index of mortgage application activity decreased 4.4 percent to 644.5 in the week ended April 1, more than offsetting an increase of 2.4 percent the previous week.

The MBA's seasonally adjusted index of refinancing applications fell 3.1 percent to 1798.8, after falling 2.0 percent the prior week.

The decrease in refinancing came despite weaker mortgage rates, but an economist said the one-week decrease in rates was a bit of an anomaly in an overall environment of rising rates.

"We are in a rising rate environment," said Robert Brusca, chief economist at Fact and Opinion Economics (search) in New York, adding "at some point rates get to be so high that the refinancing numbers are going to react to the fact that rates are high, and people start backing off from refinancing."

According to the MBA, fixed 30-year mortgage rates (search) averaged 5.91 percent last week, excluding fees, down 17 basis points from 6.08 percent the previous week but still above rates a year ago. The fixed 30-year mortgage rate as of April 2, 2004 was 5.75 percent, MBA data showed.

Mortgage rates generally have risen in tandem with the increase of official interest rates by the Federal Reserve (search) bank.

"The refinancing index has been off for three weeks in a row and it started off with a huge decline three weeks ago -- down by 16.5 percent," Brusca said.

The refinancing share of mortgage activity increased slightly to 38.3 percent of total applications from 37.8 percent the previous week.

Adjustable-rate mortgage share of activity, however, decreased to 35.2 percent of total applications from 36.6 percent the previous week, the MBA said.

Applications for ARMs have recently made up an increasing portion of overall applications. The percentage of ARMs within overall applications reached its highest level in the week ended March 25 since the MBA began compiling the data in 1990.

ARMs are more attractive to people who want small monthly mortgage payments. But the mortgages come with more risk than fixed-rate loans because their rates can be reset to a higher level before maturity.

The MBA's purchase index, a gauge of loan requests for home purchases, fell 5.3 percent to 446.0, after it rose 5.5 percent the previous week.

The average contract interest rate for 15-year fixed rate mortgages decreased to 5.48 percent from 5.61 percent a week earlier, while the average interest rate of one-year ARMs decreased to 4.29 percent from 4.39 percent a week earlier.