Last week, home-purchase demand reached its highest pace since May. According to The Mortgage Bankers Association’s Weekly Applications Survey, the Purchase Index rose 6.3 percent over the week before, but was 38.8 percent lower than last year. Total mortgage loan application volume fell 1.5 percent due to a 3.1 percent drop in the Refinance Index. Michael Fratantoni, MBA’s vice president of research and economics, said, despite the drop in refinance volume, historically low mortgage rates are keeping refinance applications close to recent highs. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.50 percent from 4.43 percent a week earlier. More here and here.