Home loan applications rose last week for the first time in seven weeks, as mortgage rates fell for a second week in a row, according to Realtor.com. The Mortgage Bankers Association's index of total application volume climbed 3.4% for the week ending October 23rd. Applications to buy a home rose 4% from the prior week but were still 18% below a year ago. MBA data put the average 30-year fixed rate at 7.37%, down from 7.41% and the lowest in three weeks. Freddie Mac's separate survey showed a similar drop, to 7.32% from 7.4%.

MBA deputy chief economist Joel Kan said lower rates gave borrowers "some relief," but he noted that rates are still more than a percentage point higher than a year ago. Most homeowners are also holding loans with much lower rates than what's available today. That gap is pushing more buyers toward adjustable-rate mortgages, which carry more risk but currently run almost a full point below 30-year fixed rates. ARMs made up 11.3% of applications, up from 10.5% and the highest share in more than a year.

Refinancing is still weak. Refinance applications rose 3% on the week but were 61% below the same week last year, because many homeowners don't want to give up their cheaper existing loans. The refinance share of total activity slipped to 38.9%. The Federal Reserve is meeting this week after raising rates in September, and Chair Kevin Warsh and other policymakers are widely expected to hold rates steady ahead of next week's midterm elections.