Mortgage rates moved even lower last week after setting multiple record lows in recent months, spurring more borrowers to call their lenders and apply for a refinance, but homebuyers were not quite as motivated.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 slipped to 3.01% from 3.05%, while points decreased to 0.37 from 0.52 for loans with a 20% down payment.

In response, refinance application volume, which is most sensitive to weekly rate moves, rose 8% for the week and was 50% higher than a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. That is the highest refinance volume since mid-August.

Applications for a mortgage to purchase a home fell 2% for the week but were 21% higher than a year ago. While the annual comparison is strong, purchase volume has been falling little by little and is now down just over 4% from four weeks ago.

“There are signs that demand is waning at the entry-level portion of the market because of supply and affordability hurdles, as well as the adverse economic impact the pandemic is having on hourly workers and low- and moderate-income households,” said Joel Kan, an MBA economist. “As a result, the lower price tiers are seeing slower growth, which is contributing to the rising trend in average loan balances.”

The average loan size increased again, to a record $371,500, thanks to stronger activity on the high end of the market.

Mortgage rates climbed slightly to start this week but are likely to head lower on the news that President Donald Trump said he is halting stimulus negotiations until after the election.

“Markets entered a logical tailspin resulting in significant stock losses and improvements for bonds,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “These sorts of bond market improvements typically result in lower rates.”

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