A slight increase in mortgage interest rates was enough to tank refinances and bring down overall demand.
Total mortgage application volume fell 4.2% last week from 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 ($548,250 or less) increased to 3.18% from 3.15%, with points decreasing to 0.35 from 0.36 (including the origination fee) for loans with a 20% down payment.
While the rate increase was small, refinance demand fell 7% for the week and was 9% lower than a year ago. So many borrowers have already refinanced at rates below 3% that there is…