The average purchase application size hit $411,400 — the highest since February.
The average rate for 30-year fixed-rate mortgages increased to 3.15% from 3.11%

Sky-high home prices mean demand for ever bigger mortgages, but those prices may also be causing a pullback in homebuying overall.

Mortgage applications to purchase a home fell 4% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Volume was just 2% higher than the same week one year ago, when the housing market was just starting to come back after the pandemic shut it down.

"A decline in purchase applications was seen for both conventional and government loans," said Joel Kan, an MBA economist. "There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply."