A slight increase in mortgage rates was enough to fuel refinancing and lower overall demand.

According to the seasonally adjusted index of the Mortgage Bankers Association, the total volume of mortgage applications in the past week is down 4.2% compared to the previous week.

The average contract rate on 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) increased from 3.15% to 3.18%, with credit points decreasing 20% ​​from 0.36 (including the origination fee) to 0.35 decreased payment.

While the rate hike was small, refinancing demand fell 7% over the week and was 9% lower than a year ago. So many borrowers have already refinanced themselves at interest rates below 3% that there are few options left.

The refinancing share of mortgage activity decreased from 63.3% in the previous week to 61.4% of the total applications.

Home purchase mortgage applications rose 2% over the week but were 4% lower than a year ago.

“While buying activity was around 4% lower than a year ago, it compares to the strong surge in activity last spring when the pandemic lockdowns were lifted,” said Joel Kan, MBA economist. “Demand is robust across the country, but home buyers continue to be held back by the lack of home for sale and rapidly rising home prices.”

Prices for new and existing homes are rising at the fastest rate in nearly two decades, and this has shifted much of the demand to the high end of the market. The size of the mortgage loan is increasing and breaking new records. Luxury companies like Toll Brothers continue to have strong sales.

“We are encouraged by the continued strength of the real estate market, supported by long-term supply and demand imbalances, favorable demographics, particularly the drive for home ownership among millennials, low mortgage rates and an overall higher appreciation for home ownership. That’s off of the.” Pandemic emerged, “said Douglas Yearley, CEO of Toll Brothers, on the company’s quarterly income statement released Tuesday.