A surge in refinance applications drove mortgage application volume higher for the second straight time last week. The Mortgage Bankers Association said its Market Composite Index, a measure of that volume, increased 7.1 percent on a seasonally adjusted basis, 8.0 percent before adjustment.  

Refinancing was 12.0 percent higher than the previous week and surpassed the Refinancing Index level during the same week in 2024 by 5.0 percent. Refinancing accounted for 31.6 percent of applications, up from 30.2 percent the previous week.

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The seasonally adjusted Purchase Index rose 5.0 percent from one week earlier and was 6.0 percent higher unadjusted, remaining 11 percent lower than the same week one year ago.  

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“Mortgage rates dropped below 7 percent last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Purchase application volume increased for the week but remains about 11 percent below last year’s level. By contrast, refinance volume picked up by 12 percent, with a larger, 24 percent increase in the government refinance index. While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years.”

Additional Data from MBA’s Weekly Mortgage Applications Survey

• The size of home loans rose again last week with the average growing to $390,700 from $385,100. Purchase loans increased by slightly less than $2000 to $444,300.
• The FHA share of applications decreased to 12.0 percent from 12.7 percent while the VA share increased to 12.2 percent from 11.4 percent.  USDA maintained its usual fractional percentage share.
• The average contract interest rate for conforming 30-year fixed-rate mortgages (FRMs) dropped to 6.84 percent from 7.02 percent, with points decreasing to 0.65 from 0.67.  
• The jumbo version of the 30-year FRM carried an average rate of 7.04 percent and 0.38 point, falling from 7.21 percent with 0.36 point the prior week.
• Thirty-year FHA-backed FRM had an average rate of 6.77 percent, down from 6.86 percent the previous week. Points increased to 0.95 from 0.90.
• The rate for 15-year FRM fell by 29 basis points week-over-week to 6.37 percent. Points rose to 0.77 from 0.67.
• The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) was unchanged at 6.38 percent, with points decreasing to 0.52 from 0.67. The share of ARM applications was also unchanged at 7.7 percent.