Key Takeaways
- Home buyers and refinancers applied for mortgages at the highest level since 2022 as mortgage rates fell to their lowest since last October.
- Mortgage volume was higher last week than the same time last year as borrowers rushed to take advantage of falling rates.
- Significant increases were seen in applications for both purchases and refinancing, especially for borrowers with larger loans.
Mortgage rates hit their lowest levels since last October and people took notice—applications for home loans surged last week.
According to Mortgage Bankers Association data, the 30-year fixed mortgage rate declined for a second week, falling to 6.49% in the week ending Sept. 5. The decline sent signals to borrowers, who applied for 9% more mortgages than the previous week.
“The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher,” said Joel Kan, MBA deputy chief economist.
Data Shows Signs of Life in Housing Market
The housing market may be beginning to thaw after elevated mortgage rates and high-priced housing have helped to freeze sales. Mortgage application volumes have been at historically low levels as interest rates have hovered above 6.5% for most of the year.
The recent decline in rates has motivated some borrowers, as buyers and homeowners chase cheaper borrowing costs.
Applications for home purchases reached their highest levels since July and were 20% above last year’s levels. Meanwhile, homeowners took advantage of the dip in rates to refinance their existing mortgage, sending those levels higher by 12% compared with the prior week.
“The average loan size for refinances also increased significantly, since borrowers with large loans are more sensitive to bigger rate moves,” Kan said.