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Mortgage rates ticked up slightly for the first time in months last week, cooling off hot demand for refinancing . But demand for purchase applications — mortgages to buy a home — continued to rise.

The 30-year fixed rate inched up to 6.14% from 6.13% a week earlier, enough to send refinancing applications down 3% from the previous week and causing overall loan applications to drop 1.3%, according to data from the Mortgage Bankers Association released Wednesday.

Refinancing activity, when current homeowners swap out their old mortgages for new ones, was still 186% higher than a year ago. Purchase applications, on the other hand, climbed another 1% from a week prior and were up 9% from the same time a year ago.

“The news for the week was that more homebuyers appear to be entering the market,” said Mike Fratantoni, Mortgage Bankers Association’s chief economist, in a statement. “Inventories of both new and existing homes have been increasing over the course of 2024, meaning that potential buyers have properties to look at and now have somewhat lower mortgage rates leading to better affordability.”

The refinance share of all loan applications remained high at 54.9%, down from 55.7% the previous week. Because of its massive share of total application volume, any decline in refinancing activity is bound to show slowing of overall applications.

This slowdown also follows a spike in mortgage demand ahead of the Federal Reserve’s decision to lower interest rates last month — the first time it had done so since 2020. Last week’s uptick was not wholly unexpected, given that many economists saw the months-long decline in mortgage rates as the market’s adjustment to anticipated lower interest rates.

“While rates may continue to fall as the Fed provides more guidance on its future monetary policy, the majority of the adjustment in mortgage rates appears to have already been priced in,” Ruben Gonzalez, chief economist at Keller Williams, said in a statement following the rate decision.

There have been some signs of a loosening market . In August, there were almost 36% more homes for sale on a typical day compared with a year ago — the highest level since May 2020, Realtor.com ( NWS ) found. At the same time, the median home sale price was $434,050, up 3.2% from a year prior but a slower rate of price growth than in previous months.

Still, most homeowners are holding out for rates below are waiting for mortgage rates to drop below 6% (or lower) before deciding to move, according to a Bankrate survey .

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