Mortgage rates rose significantly last week, leading to a decline in overall mortgage demand.

According to the Mortgage Bankers Association’s seasonally adjusted index, overall application volume fell 0.7% compared to the previous week. That was the first decline in five weeks.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased from 6.67% to 6.75%, with points for loans with a 20% down payment remaining unchanged at 0.66 (including the origination fee). stayed. In the same week a year ago, that rate was just 8 basis points higher.

The reason for the decline was the demand for refinancing. It fell 3% this week but was still 41% higher than the same week a year ago. While mortgage rates aren’t much lower right now than they were a year ago, refinance volumes in general may be so low that any slight movement requires a big settlement.

Mortgage applications to purchase a home rose 1% this week and were 6% higher than the same week a year ago.

“Conventional and VA purchase applications led to an increase in purchasing activity on a weekly and annual basis this week. “Buyers remained active in the buying market, supported by a gradual improvement in inventory conditions and a more positive outlook for the economy and labor market,” wrote Joel Kan, vice president and deputy chief economist at MBA.

Mortgage rates were essentially unchanged earlier this week as the market awaits Wednesday’s Federal Reserve meeting, according to a separate survey from Mortgage News Daily. A rate cut is expected, but some analysts believe it could be the last one for a while.

“Markets know that the Fed will cut rates and that the dot chart (also known as the interest rate outlook survey, which is updated four times a year and closely watched by bonds) will show a higher rate path than in September,” wrote Matthew Graham, Chief Operating Officer at Mortgage News Daily. “What we don’t know is how dire a dot plot or how hawkish a Powell the market will be willing to accept.”