Rising borrowing costs are dampening U.S. refinancing activity, with its weekly share of mortgage applications falling to its lowest level since August, the Mortgage Bankers Association said on Wednesday.

The Washington-based group said its index on refinancing applications fell 2.9 percent to 1,288.0 in the week ended Jan. 26 as average interest rates on 30-year mortgages rose to their highest level since March.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 26.

The refinance share of mortgage activity decreased to 47.8 percent of total applications, its lowest level since August 2017, from 49.4 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since March 2017, 4.41 percent, from 4.36 percent.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since April 2011, 3.85 percent, from 3.81 percent.

"Rates moved higher last week driven by concerns over a weaker U.S. dollar, signs of more robust growth and rising rates abroad, and moderately strong fourth-quarter domestic growth," MBA economist Joel Kan told CNBC.

(Newsmax wire services contributed to this report).

• 6 Things That Influence Mortgage Interest Rates
• Yale's Shiller: Tax Bill's Mortgage Interest Deduction Won't Sway Home Prices