An increase in mortgage rates chilled demand for home loans last week, according to the Mortgage Bankers Association.

The average U.S. rate for a 30-year fixed mortgage rose to 4.02% during the week ending Oct. 18, prompting an 11.9% drop in mortgage applications, MBA said Wednesday.

The U.K.’s Brexit turmoil and the U.S.-China trade war are causing interest rates to be volatile, said Mike Fratantoni, MBA’s senior vice president and chief economist. That’s quashing demand from some would-be borrowers, he said.

“Last week, mortgage rates jumped 10 basis points and were above 4% for the first time since September,” Fratantoni said. “The increase in mortgage rates caused refinance applications to drop 17% and by more than 20% for conventional loans.”

Fratantoni says borrowers with larger loans are the most sensitive to rate changes, and with rates climbing higher last week, the average size of a refinance loan application fell to its lowest level in 2019.

The MBA indicates that the nation’s purchasing demand also weakened as the seasonally adjusted Purchase Index and the unadjusted Purchase Index both fell 4% from the previous week.

“Although purchase applications declined, application volume is still running about 6% ahead of this time last year,” Fratantoni said. “Low mortgage rates continue to fuel buyer interest, but supply and affordability challenges persist.”

Here is a more detailed breakdown of this week’s mortgage application data:

• The refinance share of mortgage activity decreased to 58.5% from last week’s 62.2%.
• The adjustable-rate mortgage share of activity fell to 4.8% of total applications.
• The Federal Housing Administration’s share of mortgage apps grew to 12.1% from last week’s 11.3%.
• The Department of Veterans Affairs’ share of applications moved forward to 13.5% from last week’s 12.9%.
• The Department of Agriculture’s share of total applications ticked up from last week’s 0.4% to 0.5%.
• Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) moved forward from last week’s rate of 3.92% to 4.02%.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased from last week’s 3.9% to 3.96%.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to 3.79% from last week’s 3.77%.
• The average contract interest rate for 15-year fixed-rate mortgages increased from last week’s 3.32% to 3.39%.
• The average contract interest rate for 5/1 ARMs retreated to 3.29% from last week’s 3.37%.