- Mortgage demand spiked with total applications up 11.2% week-to-week, driven by the 30-year fixed-rate dropping to 6.67% – the lowest since October 2024 – down from 6.73%, per the Mortgage Bankers Association (MBA).
- Refinance applications surged 16% weekly and 90% year-over-year, while purchase applications rose 7% weekly and 4% annually, with government loans like FHA at 6.34% and average purchase loan sizes hitting a record $460,800.
- Rates stabilized this week after a Monday fall and Tuesday rise, with Wednesday’s consumer price index release set to influence future trends, following six weeks of declines boosting spring season activity.
Mortgage demand surged last week as total applications climbed 11.2% week-to-week, propelled by a drop in the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $806,500 or less, which fell to 6.67% from 6.73%, according to the Mortgage Bankers Association’s seasonally adjusted index. This rate, the lowest since October 2024, marks a decline of 17 basis points compared to the same week a year ago, despite points ticking up to 0.63 from 0.60, including the origination fee, for loans with a 20% down payment. Joel Kan, an MBA economist, told CNBC that this decline – the sixth consecutive week of falling rates – has sparked a robust response across the market, particularly as the spring homebuying season approaches, amplifying activity in both refinancing and purchasing sectors.
Refinance applications, highly sensitive to weekly rate shifts, soared 16% from the prior week and were 90% higher than the same period last year, reflecting opportunities for borrowers who secured loans in the past two years when rates peaked to now capitalize on savings, even though most homeowners today hold rates far below current offerings. Meanwhile, applications for home purchases rose 7% week-to-week and 4% year-over-year, bolstered by an 11% jump in government-backed loans, notably FHA loans with rates dropping to 6.34%, alongside a notable increase in average purchase loan sizes to $460,800—the highest recorded in the survey’s history since 1990. These figures highlight a market energized by lower borrowing costs, though the total volume of applications remains relatively modest, making percentage gains appear more pronounced.
This week, mortgage rates have stabilized after a Monday dip and a Tuesday rebound of equal measure, as reported by Mortgage News Daily, with the monthly consumer price index release on Wednesday poised to influence future movements based on its implications for inflation. The sustained decline in rates to 6.67% – a level not seen in over five months – follows a significant uptick in demand the previous week, suggesting a cumulative effect as buyers and refinancers seize the moment. Kan emphasized the broad-based increase across all loan types, with government programs playing a pivotal role in purchase activity, while the interplay of falling rates and rising loan amounts underscores a market adapting to shifting economic conditions. The trajectory of rates, now teetering on the edge of inflationary data, will likely shape whether this momentum persists or pivots in the weeks ahead.
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