An ‘Open House’ sign is displayed in the front yard of a home for sale in Columbus, Ohio.Ty Wright | Bloomberg | Getty ImagesThe stunning surge in home buying, brought on by the coronavirus pandemic, may finally be easing up. Mortgage rates are hovering near record lows, but buyers are experiencing sticker shock in today’s overheated housing market.Mortgage applications to purchase a home fell 0.8% in the two weeks ended Jan. 1, compared with the second week of December, according to the Mortgage Bankers Association, whose seasonally adjusted index took into account the Christmas and New Year holidays.More telling was that purchase volume was just 3% higher than the same period a year earlier. Annual comparisons in the last several months have shown purchase volume more than 20% higher year over year. Clearly buyers are pulling back.Home prices have been rising at increasing speed, and that may be sidelining more and more buyers even with near record low mortgage rates.The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 2.86% from 2.90% to finish out the year. Points increased to 0.35 from 0.31 (including the origination fee) for loans with a 20% down payment. Mortgage demand from buyers pulled back in the last two weeks of 2020, likely due to fast-rising prices.”The record-low rates for fixed-rate mortgages is good news for borrowers looking to refinance or buy a home, as around 98% of all applications are for fixed-rate loans,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.Still, applications to refinance a home loan fell 6% from two weeks earlier. They were 100% higher than the same week a year earlier. Mortgage rates were more than a full percentage point higher at the end of 2019.Most analysts do not expect mortgage rates to rise meaningfully in 2021, as the Federal Reserve continues to pour money into the mortgage market. Rates started this week matching the latest record low. There is of course big potential this week for a move in either direction, given the U.S. Senate runoff elections in Georgia and the monthly employment report on Friday.