Mortgage application volume surged 10.9% on an adjusted basis last week, driven mainly by a sharp increase in applications for refinances, as rates dropped, according to the Mortgage Bankers Association.
Applications for refinances jumped 23% compared with the previous week and were up 8% compared with the same week one year ago, according to the MBA’s Weekly Applications Survey.
Applications for purchases increased 1% compared with the previous week and were up 17% compared with the same week one year ago.
“The 30-year fixed mortgage rate declined to 6.67 percent last week, which spurred the strongest week for refinance activity since April,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Borrowers responded favorably, as refinance applications increased 23 percent, driven mostly by conventional and VA applications. Refinances accounted for 46.5 percent of applications and as seen in other recent refinance bursts, the average loan size grew significantly to $366,400. Borrowers with larger loan sizes continue to be more sensitive to rate movements.”
“Given the relative attractiveness of ARM rates compared to fixed rate loans, ARM applications increased 25 percent to their highest level since 2022, and the ARM share of all applications was almost 10 percent,” Kan adds. “However, lower rates were not enough to entice more homebuyers back into the market, as purchase applications were only up around one percent over the week, although still stronger than last year’s pace.”
The refinance share of mortgage activity increased to 46.5% of total applications, up from 41.5% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 9.6% of total applications.
Photo: Herve Margo