Potential homebuyers attend an open house in Seattle.
Mike Kane | Bloomberg | Getty Images
Interest rates surged last week to their highest level in a month, and consequently homebuyers turned on their heels.
Total mortgage application volume decreased 1.1% for the week, according to the Mortgage Bankers Association’s seasonally adjusted index, but it was 36% higher than a year ago, thanks to stronger refinance activity.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.12% from 4.04%, with points increasing to 0.38 from 0.37 (including the origination fee) for loans with a 20% down payment.
Mortgage applications to refinance, which are usually very rate-sensitive, actually increased 2% for the week and were 87% higher than a year ago, when interest rates were 65 basis points higher.
“Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA refinance…