Rates on 30-year mortgages reached their highest level since December 2000, and mega-mortgage rates rose to their highest level in 12 years.

Soaring rates have hurt demand for refinancing and home purchase applications. That overall pushed up the Market Composite Index - a measure of mortgage applications - the Mortgage Bankers Association (MBA) said Wednesday.

In the week ending 22 September, the market index fell 1.3% from a week earlier to 189.6. a year ago, it stood at 254.8.

Demand for home purchases and refinancing has declined as interest rates have risen across the board.

Few homebuyers think it's a good time to buy a home. The Home Purchase Index, which measures applications for purchase mortgages, fell 1.5 percent from last week.

Homeowners are also less interested in refinancing. The Refinance Index fell 0.9 percent.

The average contracted interest rate for 30-year home mortgages with a sale price of $726,200 or less was 7.41% for the week ending 22 September.This was up from 7.31% the previous week, the MBA said.The rate for 30-year loans was the highest since December 2000.The MBA said the rate was up from 7.31% the previous week.The MBA said the rate was up from 7.31% the previous week.The MBA said the rate was up from 7.31% the previous week.

The 30-year mortgage rate for jumbo loans, homes selling for more than $726,200, was 7.34 percent, up from 7.32 percent the previous week. Jumbo loan rates are at their highest level since January 2011, when the MBA began tracking the data.

The average rate for 30-year mortgages backed by the Federal Housing Administration rose to 7.16 percent from 7.08 percent. FHA rates are at their highest level since March 2002.

Rates on 15-year mortgages rose to 6.73 per cent from 6.62 per cent the previous week. 15-year rates are at their highest level since July 2001.

Adjustable-rate mortgages rose to 6.47 per cent from 6.42 per cent the previous week.

Since the Federal Reserve Board paused its rate hike earlier this month, the market now expects interest rates to remain on hold for the time being, which has pushed mortgage rates higher.

Rising interest rates could further dampen demand for homeownership, hurting sales of both new and used homes. Refinancing activity could also dry up further, as few homeowners with rates above 7 per cent could benefit from refinancing.

MBA says: "Rising interest rates have led to a decline in applications as prospective homebuyers and homeowners continue to feel the impact of rising interest rates," Joel Kan, MBA's deputy chief economist and vice president, said in a statement.