7% interest rates hit weekly mortgage demand hard

Higher mortgage rates continue to hit demand from both current homeowners and potential homebuyers.

Total mortgage application volume dropped 5.6% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. An additional adjustment was made to account for the Presidents Day holiday.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.04% from 7.06%, with points increasing to 0.67 from 0.66 (including the origination fee) for loans with a 20% down payment. The rate was about a quarter percentage point higher than it was one year ago.