After increasing for three weeks, mortgage rates fell a little last week. However, it did not seem to have any effect on mortgage demand.

According to the seasonally adjusted index of the Mortgage Bankers Association, the total volume of applications rose 1.6% last Wednesday compared to the previous week.

The average 30-year fixed rate mortgage interest rate with conforming loan balances (548,250 or less) fell to 3.03% from 30.06%. Points dropped to 0.29 from 0.34 (includes the origination fee), for loans with 20% down payments.

“Treasury yields dropped last week as investors monitor whether the increase in COVID-19 case in several states will dampen economic activity. Joel Kan, an MBA economist, said that mortgage rates have slightly decreased as a result.

Refinance applications for a home loan were just 1% higher this week than they were one year ago. Problem is, many borrowers have refinanced at lower rates than they were last fall.

The week saw an increase in applications for loans to buy a house, but they were only 3% higher than one year ago. The affordability barrier is hitting homebuyers. While the supply of homes for purchase has increased slightly, it’s still too low.

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Kan stated that “the purchase index was at its highest point since early July, even though it still lags 2020’s pace.” Kan also said, “There was also some improvement in average loan sizes which could be a sign first-time buyers are looking for lower-priced houses. This may be due to the recent increase in for-sale inventory, both for new homes and for existing homes.”