Applications for U.S. home mortgages tumbled last week as higher interest rates sapped demand for loan refinancing, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 7.5 percent in the week ended March 25.

“As rates climb back to 5 percent, fewer homeowners have both the incentive and the ability to refinance,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement.

“Purchase volume remained roughly flat as we enter what is typically the peak homebuying season.”

The MBA’s seasonally adjusted index of refinancing applications dropped 10.1 percent, while the gauge of loan requests for home purchases slipped 1.7 percent.

Fixed 30-year mortgage rates averaged 4.92 percent in the week, up from 4.80 percent the week before.