Several weeks of rising rates are dousing what was incredibly high demand for refinancing. That pulled total weekly mortgage application volume down 1.9% last week. average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.92% from 2.88%, with points increasing to 0.37 from 0.33 (including the origination fee) for loans with a 20% down payment. The rate was 95 basis points higher one year ago. The average rate on the 15-year fixed rose for the first time in seven weeks, to 2.48%. With higher rates now offering fewer potential savings, applications to refinance a home loan fell 5% for the week but were 87% higher than a year ago. That annual comparison had been more than 100% just last week.
Demand from homebuyers, however, increased despite the higher rates. Mortgage applications to purchase a home rose 3% for the week and were 15% higher than a year ago. The coronavirus pandemic spurred strong demand for larger, suburban homes. Despite the vaccine rollout, that demand does not appear to be abating. The biggest hurdles for homebuyers right now are high prices and record-low inventory of homes for sale.