US mortgage applications fell last week, as mortgage rates rebounded from their lowest in more than three months, according to a Mortgage Bankers Association (MBA) report released Wednesday.

The market composite index, a measure of mortgage loan application volume, was down 2.6% on a seasonally adjusted basis for the week ending June 28. On an unadjusted basis, however, the index jumped 8% compared to the previous week.

"Mortgage rates moved higher last week, crossing the 7 percent mark, even as the latest inflation data has kept market expectations alive for a rate cut from the Fed later this year," Mike Fratantoni, MBA’s chief economist, said in a statement.

"Purchase applications decreased the final full week of June, even as both new and existing inventories have increased over the past few months," he said. "Refinance activity also remains subdued – although there was a slight increase in applications for conventional refinance loans."

The average contract interest rate for 30-year fixed-rate mortgages increased to 7.03%, from 6.93% last week when it marked the lowest in more than three months.

The rate for 15-year fixed-rate mortgages, meanwhile, climbed to 6.56% from 6.46% during that period.

The MBA survey covers more than 75% of US retail residential mortgage applications.