Increasing interest rates are causing headaches for mortgage lenders, especially those specializing in refinancing. Refinancing is no longer in demand.

For loans with a 20% down payment, the average contract interest rate increased to 3.72% from 3.64%, with points decreasing to 0.43 from 0.45 (including the origination fee). 0.78% lower than one year ago.

Thus, mortgage refinances applications, which are sensitive to daily rate changes, fell 13% for the week and were 53% lower than a year ago, according to the Mortgage Bankers Association's seasonally adjusted index. The rate has risen for five straight weeks now.

Not many borrowers left with an incentive to refinance after almost two years of lower rates, writes Joel Kan, an MBA economist. For those still looking to refinance, these higher rates are less appealing.

The mortgage applications fell just 2% for the week and 11% from a year ago. As some buyers try to jump on the spring market, buyers are more active than usual. With mortgage rates rising and home prices still soaring, some people are worried they won't afford the homes they want.

In Waldorf, Maryland, three offers were already on the table before potential buyers were admitted to the open house.

"We thought the winter months would lead to slack off in the housing market and prices would return to normal, but that hasn't happened. It's anguish, it's a pain, it's agony," he told his wife and daughter, who were house hunting.

In this market, where supply is scarce, that house was listed at $375,000. The majority of purchases occur at or above $433,500, another record for average purchase loans.