According to the Mortgage Bankers association's seasonally adjusted Index, mortgage applications to purchase a home grew by 8% last Week compared to the prior week. This was partly due to demand for adjustable rates mortgages. However, applications were still 10% higher than they were one year ago.

A big jump in mortgage rates may have actually spurred homebuyer demand, perhaps as consumers worried rates would move even higher. The highest mortgage rates since 2008 jumped to their highest point, with the largest one-week jump in 13 years.

The average 30-year fixed-rate interest rate on 30-year fixed mortgages with conforming loan amounts ($647,200 and less) has increased to 5.98%. In addition, points have risen from 0.71 to 0.77 (includes the origination fee), for loans with a 20 percent down payment. The rates are nearly twice what they were a year ago.

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Joel Kan, a MBA economist, stated that mortgage applications rose for the second consecutive week. The increase was driven mainly by conventional and ARM applications. He also noted that the ARM share of applications increased to over 10%. "The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating."

Adjustable-rate mortgages are lower interest rates. They can generally be fixed for five, seven, or ten years. These loans are considered more risky as they can be adjusted to higher or lower rates. However they are also underwritten more strictly than in the past housing boom, which led to an enormous housing crash.

The increase in buyer demand could also be due to the fact that there is more inventory of homes available for sale. According to Realtor.com nationwide, active inventory has increased by 17% annually. According to Realtor.com, homes are selling faster now than they did a year ago.

Applications to refinance a home loan fell 3% for the week and were 77% lower than the same week one year ago. The refinance share of mortgage activity decreased to 29.7% of total applications from 31.7% the previous week.