Weekly mortgage demand surges 20% higher, after interest rates drop to the lowest since last year

 

A sharp drop in mortgage interest rates finally lit a fire under loan demand. Both current homeowners and potential homebuyers jumped back into the market, after a lackluster showing for this year so far.

Total mortgage application volume jumped 20.4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. This was not only the first increase in three weeks, but it is an outsized weekly move.

Mortgage rates were clearly the culprit. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.73% from 6.88%, with points falling to 0.60 from 0.61, including the origination fee, for loans with a 20% down payment. That is the lowest level since December 2024. (READ MORE)