Mortgage applications saw a slight increase last week, with a boost in refinancing leading the way, according to the latest data from the Mortgage Bankers Association (MBA). The MBA’s Weekly Mortgage Applications Survey showed a 2.3% increase in overall application volume for the week ending February 7, 2025.
Refinance activity stood out, jumping 10% from the previous week and rising a significant 33% compared to the same time last year.
“Mortgage rates moved slightly lower last week, which led to the pace of refinance applications reaching its strongest week since October 2024,” said Joel Kan, vice president and deputy chief economist at MBA. “The average loan size for refinance borrowers increased, as these borrowers tend to be more responsive for a given change in rates.”
Despite the moderately good news, however, purchase applications dipped 2% on a seasonally adjusted basis. And although purchase applications are 2% higher than at this time last year, with home prices reaching new heights, the slump may be a persistent trend.
“Purchase applications were down from the previous week’s level, but were slightly ahead of last year’s pace," added Kan. “The average loan size for a purchase application increased to its highest level since March 2022 at $456,100, partially driven by fewer FHA purchase applications but more VA loans compared to the previous week.”
Market Highlights:
- Refinances accounted for 40.2% of total mortgage applications, up from 39.0% the previous week.
- Adjustable-rate mortgages (ARMs) increased to 6.0% of total applications.
- The FHA share of mortgage activity decreased slightly to 16.0% from 16.2%, while VA loans rose to 14.6% from 13.3% the prior week.
- USDA loans remained unchanged at 0.5%.
Mortgage Rates:
- The average 30-year fixed mortgage rate for conforming loans ($766,550 or less) declined slightly to 6.95% from 6.97%.
- Jumbo 30-year fixed rates fell from 7.01% to 6.96%.
- FHA-backed 30-year loans held steady at 6.69%.
- 15-year fixed rates inched down to 6.35% from 6.36%.
- 5/1 ARMs saw a rate increase, climbing to 6.20% from 6.07%.
