U.S. mortgage applications declined 2.7 percent in the week ending March 23, the Mortgage Bankers Association said Wednesday.

The MBA's refinance index decreased by 4.6 percent from the previous week. Refinances have decreased for six consecutive weeks, falling to its lowest level since December, and is 24.2 percent lower than its 2012 peak observed in February.

The refinance share of mortgage activity decreased to 71.9 percent of total applications, the lowest level since July 2011, from 73.4 percent the previous week.

The decline in refinances last week was driven largely by a 12 percent drop in government refinance activity, while conventional refinance applications fell by less, decreasing 3.4 percent from the previous week. 

The purchase index increased 3.3 percent from one week earlier.

The four-week moving average for the seasonally adjusted market index is down 3.4 percent, while the purchase index is up 2.14 percent. The four-week moving average for seasonally adjusted refinance Index is down 4.94 percent.

The average interest rate for 30-year fixed-rate mortgages of $417,500 or less jumped to 4.23 percent, the highest rate since November, from 4.19 percent. The average interest rate for 30-year fixed-rate mortgages greater than $417,500 rose to 4.54 percent from 4.49 percent.

The average interest rate for 30-year fixed-rate mortgages backed by the FHA edged up to 3.96 percent, from 3.93 percent.

The average interest rate for 15-year fixed-rate mortgages rose to 3.5 percent, the highest rate since December, from 3.47 percent.