Total mortgage application volume increased 3.9% during the week ended July 12, driven by a significant drop in mortgage rates that resulted in a surge in refinances, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The average rate for a 30-year fixed-rate mortgage decreased to 6.87%, down from 7% the previous week.
As a result, applications for refinances jumped 15% compared with the previous week and were up 37% compared with the same week one year ago.
Applications for purchases decreased 3% compared with the previous week and were down 14% compared with the same week one year ago.
“Mortgage rates declined last week, as recent signs of cooling inflation and the increased likelihood of Fed rate cuts later this year pulled them lower,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The 30-year fixed rate declined to 6.87 percent, the lowest rate since March 2024.
“Application activity was up 4 percent, driven by a 15 percent jump in refinances to the highest level since August 2022,” Kan adds. “While FHA and VA refinance applications accounted for a significant share of the increase, these are likely recently originated loans with even higher than current offered rates. Even with last week’s rate decline, purchase applications continue to lag, down 14 percent compared to last year’s pace.”
The refinance share of mortgage activity increased to 38.8% of total applications, up from 34.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 5.8% of total applications.
Photo: Scott Graham