It didn't take much to bring borrowers back to the refinance table.
Just a slight drop in interest rates pushed refinance applications higher after they had fallen for the last month.
That helped increase total mortgage application volume 3.6 percent for the week, according to the Mortgage Bankers Association, whose seasonally adjusted results included an accommodation for the Columbus Day holiday. Volume was nearly 19 percent below the same week a year ago, when interest rates were lower.
Applications to refinance a home loan rose 3 percent last week but were still nearly 36 percent lower than the same week one year ago. Refinance volume is down 16 percent from four weeks ago because of steadily rising rates. That changed last week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less decreased to 4.14 percent from 4.16 percent, with points remaining unchanged at 0.44, including the origination fee, for 80 percent loan-to-value ratio loans.
"Treasury yields were relatively flat last week. While the FOMC minutes showed an increased likelihood of one more rate increase in 2017, nudging rates slightly higher, the week's gains were offset by a downturn on Friday due to weaker than expected inflation data," said Joel Kan, an MBA economist.
Mortgage applications to purchase a home, which are less rate-sensitive, rose 4 percent last week and are now up 9 percent compared with the same week one year ago. Home sales have been hampered less by rising interest rates and more by a lack of listings.
Mortgage interest rates have moved sideways since last week, but that may be about to change.
"In the bigger picture, rates are attempting to push lower after rising fairly quickly from early September through early October," wrote Matthew Graham, chief operating officer of Mortgage News Daily. "The weakness [read: slightly higher costs] over the past two days doesn't derail that effort, but that could change if the weakness persists for another day or two."