The report released by the Mortgage Bankers Association (MBA) on Wednesday revealed that a slight rise in interest rates caused a pullback in mortgage demand last week.

According to a seasonally adjusted index from the MBA, total application volume fell 2.5 percent for the week ending 1 March 2019, while volume was 2 percent lower compared with the same week one year ago.

At the same time, purchase demand reduced 3 percent for the week, despite more homes coming onto the market and Presidents Day weekend marking the unofficial start of the usually busy spring housing season. Those buyers who were in the market, however, were seeking higher-priced homes. Volume was just 1 percent higher than the same week one year ago.

"The average loan size for purchase applications increased to a record high, led by a rise in the average size of conventional loans," said Mike Fratantoni, MBA senior vice president and chief economist. "This suggests that move-up and higher-end buyers have so far become a greater share of the spring market."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) rose to 4.67 percent from 4.65 percent, with points increasing to 0.44 from 0.42 (including the origination fee) for loans with a 20 percent down payment.