U.S. home loan demand fell sharply in the week ended Feb. 4, as mortgage rates continued to rise from their lowest levels amid growing confidence in the economic conditions of the nation, the Mortgage Bankers Association (MBA) said on Wednesday.

The total loan applications index, a measure of mortgage loan application volume, decreased 5.5 percent on a seasonally-adjusted basis from a week earlier.

Also, the refinancing loans index fell 7.7 percent from the previous week, while the purchasing index dropped 1.4 percent.

Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated. Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance,” said Michael Fratantoni, vice president, research and economics, MBA.

The refinance share of mortgage activity decreased to 66.6 percent of total applications from 69.3 percent in the previous week, the lowest level since May, 2010.

While the average contract interest rates for 30-year fixed rate mortgage increased to 5.13 percent from 4.81 percent in the previous week, 15-year fixed-rate mortgages increased to 4.29 percent from 4.13 percent.