Mortgage interest rates dropped for the fourth straight week last week, spurring both current homeowners and potential homebuyers to call their lenders. Total mortgage application volume increased 7.1% compared with 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 6.30% from 6.37%, with points decreasing to 0.58 from 0.59, including the origination fee, for loans with a 20% down payment. That is the lowest level since September 2024.
Refinance demand, which is most sensitive to interest rate changes, jumped 9% for the week and was 111% higher than the same week one year ago. Last year at this time, the average rate on the 30-year fixed was 43 basis points higher.
“This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications,” said Joel Kan, MBA’s vice president and deputy chief economist in a release. “The ARM [adjustable-rate mortgage] share of applications, which had been trending higher, dipped below 10 percent last week, as lower rates prompted more borrowers to choose fixed rate loans.”
