Weekly mortgage demand surged 11% higher last week, as rates sat near 4-year low

Mortgage rates hovered around a 4-year low last week, prompting more borrowers to refinance and more potential homebuyers to get off the fence.

Total mortgage application volume rose 11% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Last week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, was unchanged from the previous week at 6.09%, with points decreasing to 0.52 from 0.53, including the origination fee, for loans with a 20% down payment. That rate is the lowest since 2022. Last year that rate was 64 basis points higher.

Applications to refinance a home loan, which are most sensitive to weekly rate moves, jumped 14.3% from the previous week and were 109% higher than the same week one year ago.

“Refinance applications increased for the fourth straight week to the strongest pace since 2022, with conventional refinances up 20 percent,” said Joel Kan, and MBA analyst in a release. “The increase in the average loan size for refinances indicates that more borrowers with larger loan sizes are seeking to lower their monthly payments.”

Applications for a mortgage to purchase a home rose 6.1% for the week and were 10% higher than the same week one year ago. Despite some rough weather in the northeast last week, buyers are clearly getting ready for the spring housing market. There is a bit more inventory coming onto the market, but buyers are still facing high prices and uncertainty in the broader economy.

Mortgage rates surged higher Monday, according to a separate survey from Mortgage News Daily. That was in response to the U.S. and Israeli attacks on Iran and resulting war. They didn’t move Tuesday but could make another run as more economic data is released later this week, ending Friday with the monthly government employment report.