Total mortgage application volume fell 4.1% from the previous week, but were 16% higher than a year ago. The average loan amount for homebuyers hit another record high — $395,200, according to the Mortgage Bankers Association’s seasonally adjusted index reported by CNBC.

Homebuyers are seeing prices rise at the fastest rate in over six years, as highly emotional, pandemic-induced demand for housing butts up against a record low supply of homes for sale, resulting in bidding wars.

“Since hitting a recent low in April 2020, the average purchase loan amount has steadily risen – in line with the accelerating home-price appreciation occurring in most of the country because of strong demand and extremely low inventory levels,” said Joel Kan, an MBA economist.

Homebuyers also tend to be less sensitive to small moves in interest rates. After setting more than a dozen record lows last year, mortgage rates began to edge slightly higher to start this year. Applications to refinance a home loan, which are much more sensitive to daily rate moves, fell 5% for the week but were 83% higher annually. Mortgage rates were 86 basis points higher one year ago, and that comparison is now shrinking, which could hit refinancing demand harder in coming months.

“In a sign that borrowers are increasingly more sensitive to higher rates, large declines in government purchase applications and refinance applications pulled overall activity lower,” Kan said. “The refinance index has now declined for two-straight weeks.”