Mortgage demand stalls at a level not seen since 1996

Higher mortgage rates continue to take their toll on mortgage demand, especially for refinancing.

Total mortgage application volume dropped 0.8% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances — $726,200 or less — increased to 7.27% from 7.21%, with points increasing to 0.72 from 0.69, including the origination fee, for loans with a 20% down payment.

Demand for refinances dropped 5% for…