Mortgage Applications Surge as Refinances Lead the Way 🚀

Mortgage applications are soaring, jumping 11% for the week ending September 20th, according to the latest report from the Mortgage Bankers Association (MBA). This uptick is not just seasonal—it's a big shift in the market, with both adjusted and unadjusted numbers reflecting the same growth. It's the second week in a row we've seen significant increases, following last week's 14.2% spike.

What’s behind this momentum? It’s all about refinances! Falling mortgage rates have sparked a refi boom, with Freddie Mac reporting that interest rates have dropped to their lowest point since early 2023. During the week ending September 13th, refinance applications surged 24% from the previous week and a whopping 127% compared to last year. Fast forward to September 20th, and refi activity jumped another 20% week over week and an astonishing 175% compared to the same time last year.

Refinances now make up 55.7% of all mortgage applications, up from 51.2% the week prior, with both conventional and government refinances seeing major growth.

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“Mortgage applications have hit their highest level since July 2022, boosted by a 20% jump in refinance applications after a big surge the previous week,” says Joel Kan, MBA’s vice president and deputy chief economist. The 30-year fixed rate decreased for the eighth straight week to 6.13%, and FHA rates fell below 6% to 5.99%, which is a huge psychological barrier for many borrowers.

As interest rates continue to slide, we're seeing lower contract rates on new applications. For example, the average rate for 30-year fixed-rate mortgages with conforming loan balances dipped to 6.13%, down from 6.15% the previous week. FHA loans also dropped, with the average rate falling to 5.99% from 6.12%.

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Kan notes that while refinancing activity is still moderate compared to previous waves, refis now account for the majority of mortgage applications, especially as we enter the seasonal slowdown in purchase activity.

On the homebuying side, activity is slowly picking up, with the Purchase Index edging up 1% week over week for the week ending September 20th.

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Overall, the drop in rates is giving homeowners and buyers more opportunities to lock in favorable deals. It’ll be interesting to see if this refi wave continues to fuel mortgage application growth through the fall!

Need personalized advice or have questions about refinancing or home buying? Feel free to reach out directly:

📞 Call me: (270) 770-5665

✉️ Email me: mdunn@nexamortgage.com

🌐 Visit our website: calldunn.com

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