**Mortgage Rates Climb, Dampening Refinance and Purchase Applications**

Mortgage rates experienced another uptick last week, leading to a significant drop in the demand for both refinances and new purchase applications. Data from the Mortgage Bankers Association's seasonally adjusted index reveals that total mortgage application volume declined by 10.8% compared to the previous week.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less rose to 6.81% from 6.73%, while points, inclusive of the origination fee for loans with a 20% down payment, slightly decreased from 0.69 to 0.68. Joel Kan, an MBA economist, stated that this marks the sixth consecutive week of declining applications, with the latest figures showing the lowest purchase activity since mid-August and the lowest refinance activity since May.

Applications to refinance home loans, which tend to be highly sensitive to weekly rate changes, plummeted by 19% for the week. However, they were still 48% higher than the same period a year ago, when the 30-year fixed rate was 80 basis points higher. Kan noted that the average loan size on refinance applications has fallen below $300,000, indicating that borrowers with larger loans are more affected by rate fluctuations.

Similarly, mortgage applications to purchase homes fell by 5% from the previous week but were up 2% from the same week last year. Despite a recent increase in homebuying activity spurred by more supply and slightly lower home prices, rising mortgage rates are once again pricing out some potential buyers. Economic uncertainty and the upcoming Federal Reserve rate decision are also contributing to market volatility.