Ryan Ratliff, Real Estate Sales Associate at Re/Max Advance Realty, shows Ryan Paredes, left, and houses for sale in Cutler Bay, Florida on April 20, 2023.
Joe Raedle | Getty Images
A sharp drop in mortgage interest rates ultimately sparked the fire under the demand for loans. Both current and potential home buyers have returned to the market after previous inactive shows this year.
According to the Mortgage Bankers Association’s Seasonal Adjustment Index, the total mortgage application volume rose 20.4% last week compared to last week. This is not only the first increase in three weeks, but it’s also a big weekly move.
The mortgage fee was clearly the culprit. The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances fell below $806,500 from 6.88% to 6.73%, with points falling to 0.60, including starting fees for a 20% down payment loan. This is the lowest level since December 2024.
MBA economist Joel Kang said: “These factors have declined in the biggest week at 30 years of fixed interest rates since November 2024.”
Applications to refinance mortgages, which are most sensitive to weekly movements in interest rates, rose 37% in a week, 83% higher than the same week a year ago. The majority of borrowers today still have loans with interest rates that are far below what is offered today, but recent buyers over the past two years can now benefit from refinancing.
Mortgage applications to buy mortgages rose 9% in a week, but 2% higher than the same week a year ago.
“This is usually a period when purchasing activity increased, purchasing applications rose over the week, continuing to surpass last year’s pace and continued to shoot greener as we headed into the spring home viewing season,” Kang added.
The weekly jump in purchase volume is certainly a plus, but it is still historically low. Buyers oppose high home prices, limited stocks and uncertainty around the economy as a whole. New tariffs collected in China, Canada and Mexico are widely expected to raise housing prices, particularly for new construction.
Another study with Mortgage News Daily shows that mortgage rates have been very slightly lower to begin this week. On Tuesday, when tariffs came into effect, stocks and bond markets rode on a roller coaster, with bond yields, mortgage rates continuing, dropping along with stocks.
“As the day progressed, the stocks and bonds were back in the opposite direction, large enough for most mortgage lenders to return to slightly higher rates,” wrote Matthew Graham, chief operating officer of Mortgage News Daily.
Modification: The conforming loan balance figure is under $806,500. Previous versions have misrepresented the numbers.
