The refinance index increased 35% from the previous week as mortgage rates took a dip. The index was 93% higher than the same week one year ago. The refinance share of mortgage activity increased to 43.6% of total applications from 38.6% the week prior.
The seasonally adjusted purchase index increased 9% from last week. The unadjusted purchase index increased 10% compared with the previous week and was 24% higher than the same week one year ago.
Last week’s activity focused on purchase activity, which posted year-over-year growth for more than two months as for-sale inventory continues to increase steadily. This week’s report, however, narrowed in on the exponential increase in applications prompted by a welcome dip in rates amid a tariff trade war.
“Mortgage applications increased by 20% to its highest level since September 2024, driven by purchase and refinance applications picking up in a volatile week where economic uncertainty caused rates to drop across the board. The 30-year fixed mortgage rate was 6.61%, the lowest rate since October 2024,” said Joel Kan, MBA’s vice president and deputy chief economist. “Both homebuyers and refinance borrowers were quick to take advantage of this dip in rates, driving the purchase index 24% higher than a year ago to the strongest pace since January 2024.”
Continued Kan, “Refinance applications rose by 35% to the highest level in six months, as borrowers with larger loan sizes tend to be more sensitive to rate changes. The average refinance loan size jumped to its second highest in the survey at $399,600.”
The adjustable-rate mortgage (ARM) share of activity increased to 8.6% of total applications.
By product type, the FHA share of total applications saw an increase to 16.3% from 15.8% the week prior. The VA share of total applications increased to 15.7% from 14.4% the week prior, where the USDA share of total applications remained unchanged at 0.5% from the week prior.
All average contract interest rates saw decreases across the board. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 6.65% from 6.76%, while the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.33% from 6.37%.
Fifteen-year fixed-rate mortgage rates decreased to 5.93% from 6.04%, and the average contract interest rate for 5/1 ARMs decreased to 5.93% from 6.04%.
