In a notable sign of renewed activity in the housing market, mortgage applications climbed sharply last week, rising 20% from the prior week, according to data released Wednesday by the Mortgage Bankers Association (MBA).
The increase marks the highest level of application volume since September of last year, driven by both home purchase and refinance activity as interest rates dropped amid broader economic uncertainty.
Refinancing led the charge, jumping 35% from the week before and surging 93% compared to the same week in 2024. Purchase applications rose a more modest—but still meaningful—9% on a seasonally adjusted basis and 10% unadjusted, up 24% year-over-year.
“Mortgage rates fell across the board last week, providing an opening that both buyers and refinance borrowers were quick to seize,” said Joel Kan, the MBA’s Vice President and Deputy Chief Economist. “The 30-year fixed rate declined to 6.61% — the lowest we’ve seen since October. That pushed the refinance index to a six-month high and lifted the purchase index to its strongest pace since January 2024.”
Borrowers with larger loans appeared especially sensitive to the rate drop. The average refinance loan size surged to $399,600, the second-highest ever recorded in the MBA’s survey.
Market Breakdown
The share of mortgage activity dedicated to refinancing grew to 43.6% of total applications, up from 38.6% the week prior. Adjustable-rate mortgages (ARMs), often favored in lower-rate environments, also saw a modest uptick, comprising 8.6% of activity.
FHA-backed loan applications accounted for 16.3% of the total, a slight increase, while VA loans rose to 15.7 percent. USDA loan activity remained flat at 0.5%.
Interest Rates: Across the Board Declines
Rates for nearly all major loan types edged down:
- 30-year fixed-rate mortgages with conforming balances fell to 6.61% from 6.70%, though borrower points ticked up slightly.
- Jumbo loans (balances above $806,500) dropped to 6.65% from 6.76%, with points decreasing.
- FHA-backed mortgages slipped to 6.33% from 6.37%.
- 15-year fixed-rate loans averaged 5.93%, down from 6.04%.
- 5/1 ARMs also declined to 5.93% from 6.04%, as points dropped nearly in half.
- Declines in borrowing costs may reflect a recalibration in financial markets as investors respond to mixed economic signals, from inflation data to expectations around Federal Reserve policy.
The MBA’s Weekly Mortgage Applications Survey, a closely watched measure of housing demand, covers over 75% of all U.S. retail residential mortgage applications. Its latest findings suggest that while affordability challenges remain, consumers remain poised to act when rates present an opportunity.
