mortgage rates last week hit their highest level since the end of may which in turn weighed on mortgage demand total mortgage application volume dropped 44 last week compared with the previous week according to the mortgage bankers associations seasonally adjusted index demand is now at its lowest level in a month the average contract interest rate for 30year fixedrate mortgages with conforming loan balances 726200 or less increased to 685 from 675 with points increasing to 065 from 064 including the origination fee for loans with a 20 down payment while that was the average rate for the week a separate survey from mortgage news daily showed the rate crossed over 7 last thursday it has remained above that mark since then rising to 708 on tuesday of this week as a result mortgage demand to purchase a home which had been rising for three straight weeks dropped 5 for the week and was 22 lower than the same week one year ago rates are still over a percentage point higher than a year ago and housing affordability is still a challenge in many parts of the country wrote joel kan mbas deputy chief economist in a release however the average loan size for a purchase application declined to 423500 – its lowest level since january 2023 the drop in loan size according to kan was likely driven by a drop in homebuying in some highprice markets and more activity in some of the lower price tiers applications to refinance a home loan fell 4 for the week and were 30 lower than the same week one year ago as the summer progresses the annual comparison is likely to shrink as last summer was when mortgage rates shot significantly higher for the first time since before the pandemic and refinance demand consequently fell off its high cliff while the 30year fixed has remained over 7 for the last week it could be affected by employment data set to be released thursday and friday that could influence the federal reserves next moves which are likely to include further rate hikes