A turnaround in interest rates turned borrowers back on their heels last week, deflating a quick boom in refinance demand.
Mortgage application volume fell 5.6% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Applications were still 24% higher compared with the same week one year ago, thanks to the recent run-up in refinances.
The quick shifts are indicative of just how rate-sensitive today's borrowers and buyers are. After falling for four straight weeks to the lowest level in over a year, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) bounced back up to 4.40% from 4.36%, with points increasing to 0.47 from 0.44 (including origination fee) for loans with a 20% down payment.