Mortgage rates climbed for the second straight week, pulling down demand for mortgage applications, particularly for refinancing, according to a weekly industry survey.

The Mortgage Bankers Association said average rates for a 30-year mortgage moved up 0.05 percentage points to 5.36% in the week ending July 24, which follows a rebound  from 5.05% to 5.31% in the prior week. The jump in rates caused demand to shrink for the first time in four weeks.

The Market Composite Index ― which tracks the volume of mortgage applications ― fell 6.3% in the week, following a 2.8% advance in the week before. The 4-week average, which analysts look at to avoid weekly volatility, was up 2.6%.

Refinance-related loans only accounted for 52.6% of all loans in the week, as fewer people sought to refinance with interest rates rising. In the prior week refinancing accounted for 55.5% of new loans; in early January, refinancing peaked when they accounted for 85.3% of all new loans. 

The share of adjustable-rate mortgages moved up in the week, however: ARMs took up 5.5% of new loans, compared with 4.8% the previous week.

The Purchase Index, which provides an early indication of whether stabilization is taking hold in the real estate market, was flat in the week. 

In the media today, the Wall Street Journal reports that Treasury officials are calling on mortgage-servicing companies to help more people modify their loans to avoid foreclosure. Thus far, 200,000 modifications are under way, and the administration is hoping to more than double that number to half a million.

"We are on track to meet our goals," said Treasury Secretary Timothy Geithner in the article. "Still, too many homeowners are at risk of foreclosure right now."