Homes in Daly City, California, US, on Tuesday, May 19, 2026.

Jason Henry | Bloomberg | Getty Images

Mortgage demand took another leg lower, despite a brief respite from rising interest rates.

Total mortgage application volume fell 5.3% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, dropped last week to 7.41% from 7.50%, with points falling to 0.75 from 0.83 including the origination fee for loans with a 20% down payment.

"Mortgage rates decreased for the first time in over two months," said Joel Kan, an MBA economist, in a release.…