There’s good news for prospective home buyers and current home owners. Mortgage rates have ticked down in recent weeks. Unsurprisingly, the downtrend has caused the number of mortgage applications to surge, while benefitting current home owners.
According to a Sept. 10 Mortgage Bankers Association (MBA) press release, loan applications increased 9.2 percent on a seasonally adjusted basis last week from the week prior. Applications for refinancing were up 12%, too, from the previous week, and were a whopping 34% higher than the same week one year ago.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, explained in the release that the dropping interest rates are a sign of a weakened labor market, noting that the 30-year fix rate dropped to 6.49 percent — the lowest since last October.
“The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher. Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace.”
Added Kan, “The holiday-adjusted refinance index had its strongest week in a year and the average loan size for refinances also increased significantly, since borrowers with large loans are more sensitive to bigger rate moves. Refinance applications accounted for almost 49 percent of all applications last week.”
The refreshing numbers come as many prospective home buyers have seemed to accept higher interest rates as a new reality. According to a recent TurboHome-ResiClub Housing Sentiment Survey, in Q1 2025, 41% of homeowners said they’d accept a mortgage rate up to 6.0% on their next purchase. By Q3, the number was up to 52%.
While the new report is certainly good news for those hoping to buy a new home, the 30-year fixed is still 20 basis points higher than it was a year ago. At the time, rates were dropping due to weaker than expected employment numbers.
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