An aerial view of s in a neighborhood on Aug.27, 2025 in San Francisco, California. Justin Sullivan | Getty ImagesA sharp drop in mortgage interest rates finally got some buyers off the fence.
It also helped more current owners on their monthly paymentsTotal mortgage application volume jumped 9.2% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The week's results include an adjustment for the Labor Day holiday.The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.49% from 6.64%, with points falling to 0.56 from 0.59, including the origination fee, for loans with a 20% down payment."Mortgage rates declined for the second consecutive week as Treasury yields moved lower on data indicating that the labor market is weakening," said Joel Kan, an MBA economist in a release, noting that this was the lowest rate since October 2024.
"The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher."As a result, applications to refinance a loan jumped 12% for the week and were 34% higher than the same week one year ago.
The refinance of mortgage activity increased to 48.8% of total applications from 46.9% the previous week.The 30-year fixed is still 20 basis points higher than it was a year ago, but it is considerably lower than where it was at the start of last year, as well as in May, at the height of the spring buying season.
For recent buyers, today's rates could offer some savings.
The average loan size for refinances also increased significantly, because the larger the loan, the bigger the potential monthly savings.Get perty Play directly to your inboxCNBC's perty Play with Diana Olick covers new and evolving opportunities for the real estate investor, dered weekly to your inbox.
here to get access today.Applications for a mortgage to purchase a rose 7% for the week and were 23% higher than the same week one year ago.
This is the highest level since July."There was also a pickup in ARM [adjustable-rate mortgage] applications, both in terms of level and , as ARM rates were considerably lower than fixed-rate loans, which typically benefits buyers," added Kan.Mortgage rates inched up very slightly to start this week, but could move more decisively later in the week.
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