Mortgage demand rose more than 5% last week, driven by a 27% surge in refinancing applications, according to the Mortgage Bankers Association's index. The average rate for 30-year fixed-rate mortgages fell two basis points, marking the third consecutive weekly decline. Refinances were more than 40% higher than the same week last year, although base volumes remain low as most borrowers have mortgages with rates below current levels. Purchase mortgage applications dropped 4% but remain 4% higher year over year, supported by growing housing demand and inventory.