After a massive 58% weekly surge in refinance demand the week before, mortgage demand stalled again last week, even though interest rates fell further.
Total application volume rose 0.6% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.34% from 6.39%, with points increasing to 0.57 from 0.54, including the origination fee, for loans with a 20% down payment. That is the lowest level since September 2024. That, however, is a weekly average, and last week was particularly volatile. Early in the week, before the Federal Reserve cut its rate, mortgage rates, which follow loosely the yield on the 10-year Treasury, fell to the lowest level in three years. In the days after the Fed cut, however, rates rose about a quarter of a percentage point.
Refinance demand, which had spiked dramatically higher the week before, climbed just 1% for the week but was 42% higher than the same week one year ago.
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