Mortgage demand decreases to a three-month low as interest rates rise.

• The interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 7.05% from 7.01%.
• Despite a 14% decline in refinance demand during the week, it was still 12% higher compared to the same week a year ago.
• The number of mortgage applications for purchasing a home decreased by 1% during the week and was 10% lower compared to the same week last year.

Mortgage rates rose last week, causing a halt in the strengthening demand for mortgages that had been ongoing for several weeks.

The interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 7.05% from 7.01%, with points rising to 0.63 from 0.60 (including the origination fee) for loans with a 20% down payment.

Although it may not seem significant, the recent increase in rates was the first in four weeks, and it occurred after rates had fallen back into the high 6% range before rising again in the second half of the week.

Last week, the Mortgage Bankers Association's seasonally adjusted index showed a 5.7% decrease in total mortgage application volume compared to the previous week.

According to Joel Kan, an MBA economist, both purchase and refinance applications decreased, resulting in the lowest overall activity since early March. This is due to borrowers being sensitive to rate increases, which negatively affects the refinance market and keeps purchase applications below the previous year's levels.

The demand for refinancing, which had been in a modest recovery phase, experienced a 14% decline for the week, but was still 12% higher than the same week a year ago.

The number of mortgage applications for purchasing a home decreased by 1% during the week and was 10% lower compared to the same week last year.

Kan stated that there are still limited homes for sale and many buyers are facing difficulties in finding listings that match their requirements and budget.

Mortgage rates increased by 12 basis points on Tuesday, as reported by Mortgage News Daily, following the comments of Minneapolis Federal Reserve President Neel Kashkari on CNBC. He stated that he requires "Many more months of positive inflation data" before he can be confident to reduce interest rates.