Mortgage applications rise 7.1% as rates fall

"The refinance index increased 9% from the previous week and was 111% higher than the same week one year ago. The refinance share of mortgage activity increased to 57.1% of total applications from 55.9% the previous week. The seasonally adjusted purchase index increased 5% a week earlier. The unadjusted purchase index increased 4% compared with the previous week and was 20% higher than the same week one year ago."

"This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications, said Joel Kan, MBA's vice president and deputy chief economist. The ARM share of applications, which had been trending higher, dipped below 10% last week, as lower rates prompted more borrowers to choose fixed-rate loans. Kan continued, Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements."

On an unadjusted basis overall mortgage application volume increased; the refinance index rose 9% week-over-week and 111% year-over-year, and refinance share climbed to 57.1% of applications. Purchase activity also increased, with the unadjusted purchase index up 4% week-over-week and 20% above the prior year. Mortgage rates fell for a fourth straight week, bringing the 30-year fixed rate to 6.30%, the lowest since September 2024, which encouraged more refinances and reduced interest in ARMs. Average refinance loan size stayed high at $393,900. USDA applications fell sharply amid the government shutdown, and FHA, VA, and USDA product shares declined slightly.

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