Mortgage applications in the U.S. fell in the week ended March. 25, following an sharp increase in mortgage interest rates.

The total loan applications index, a measure of mortgage loan application volume, fell 7.5 percent on a seasonally-adjusted basis from a week earlier, the Mortgage Bankers Association (MBA) said on Wednesday.

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 Michael Fratantoni, vice president of research and economics at MBA.

While the refinancing index fell 10.1 percent from a week earlier, purchasing index decreased 1.7 percent.

“Refinance volume predictably fell in response to these rate increases. As rates climb back to 5 percent, 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,” said Fratantoni.

The average contract interest rates for 30-year fixed rate mortgage increased to 4.92 percent from 4.80 percent in the previous week, while the 15-year fixed-rate mortgages fell to 4.16 percent from 4.02 percent.