Mortgage applications increased 2.3% last week, driven by a surge in refinance activity, as more homeowners take advantage of slightly lower interest rates.
The Refinance Index jumped 10% from the previous week and was 33% higher than last year, according to the Mortgage Bankers Association (MBA) weekly survey.
Some homeowners who locked in a mortgage in the past few years have started to refinance as they take advantage of a mortgage rate–that's a full point lower than last year.
The seasonally adjusted Purchase Index fell 2% though the unadjusted index rose 4% week-over-week.
MBA's vice president Joel Kan said lower rates boosted refinancing, with larger loan sizes reflecting borrower responsiveness.
"Mortgage rates moved slightly lower last week, which led to the pace of refinance applications reaching its strongest week since October 2024," Kan said. "The average loan size for refinance borrowers increased, as these borrowers tend to be more responsive for a given change in rates."
Kan said purchase applications were down from the previous week.
Kan said the average loan size for purchase applications hit $456,100, the highest since March 2022.
The refinance share of mortgage activity rose to 40.2%, while VA loans saw increased demand.
Interest rates on most fixed-rate loans declined, though adjustable rate mortgages (ARMs) saw a slight increase.
