Mortgage applications surged last week as falling interest rates spurred a wave of refinancing, according to data from the Mortgage Bankers Association (MBA).
The MBA’s Weekly Mortgage Applications Survey for the week ending Feb. 28, 2025, showed a 20.4% jump in mortgage applications from the previous week. The Market Composite Index, which measures mortgage loan application volume, rose 22% on an unadjusted basis.
Refinancing activity skyrocketed, with the Refinance Index climbing 37% from the prior week — an 83% increase from the same time last year. Purchase applications also gained ground, with the seasonally adjusted Purchase Index up 9% for the week and 2% higher than a year ago.
Driving the surge: a dip in mortgage rates. The average rate for a 30-year fixed-rate mortgage dropped to 6.73%, the lowest since December 2024, following concerns over the economy and new tariffs on imported goods. FHA-backed loans saw rates fall to 6.42%.
“The decline in mortgage rates fueled the fastest pace of refinancing since October,” said Joel Kan, MBA’s vice president and deputy chief economist. “Conventional refinance applications jumped 34%, and government-backed refinances surged 42%, led by a 75% spike in VA loan refinances.”
As the spring homebuying season approaches, Kan noted that purchase applications remain ahead of last year’s pace, signaling positive momentum in the housing market.
The refinance share of total mortgage activity increased to 43.8%, up from 38.9% the prior week. Adjustable-rate mortgage (ARM) applications ticked up to 5.8% of all applications.
Among loan types, FHA-backed mortgages accounted for 16.7% of total applications, down from 17.4%. VA loans increased to 14.6%, while USDA-backed loans held steady at 0.5%.
Interest rates saw declines across the board:
- 30-year fixed-rate mortgages (conforming loans up to $806,500) dropped to 6.73% from 6.88%;
- Jumbo 30-year fixed loans (above $806,500) fell to 6.83% from 7.00%;
- FHA-backed 30-year fixed loans decreased to 6.42% from 6.57%;
- 15-year fixed-rate mortgages dropped to 6.12% from 6.25%; and
- 5/1 adjustable-rate mortgages fell to 5.85% from 6.05%.
With rates retreating and demand picking up, all eyes are on the housing market as it heads into its busiest season of the year.
