Mortgage Applications Surge as Rates Fall to October 2024 Low
San Francisco, CA – September 10, 2025 – A decline in mortgage interest rates has spurred a significant increase in homebuyer demand, with total mortgage application volume rising 9.2% last week, according to the Mortgage Bankers Association (MBA). The increase, adjusted for the Labor Day holiday, marks the strongest week for borrower demand since 2022.
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% the previous week. Points also fell, moving to 0.56 from 0.59, including origination fees, for loans with a 20% down payment.
“Mortgage rates declined for the second consecutive week as Treasury yields moved lower, reflecting data indicating a weakening labor market,” explained Joel Kan, an MBA economist. This drop brought rates to their lowest point since October 2024.
The decrease in rates fueled activity across the board. refinance applications jumped 12% for the week and are now 34% higher than the same week last year,increasing the refinance share of total applications to 48.8% from 46.9%. The average loan size for refinances also increased, suggesting homeowners are seeking to capitalize on potential monthly savings.
Purchase applications also saw a rise, increasing 7% for the week and reaching the highest level as July. This represents a 23% increase compared to the same week one year ago. Borrowers also showed increased interest in adjustable-rate mortgages (ARMs), with both the volume and share of ARM applications increasing due to their lower rates compared to fixed-rate loans.
While the 30-year fixed rate remains 20 basis points higher than a year ago, it is significantly lower than rates seen earlier in the year, especially during the peak of the spring homebuying season in May.
Market watchers anticipate potential shifts in rates later this week with the release of key inflation reports on Wednesday and Thursday, which are expected to influence market reactions.
[Image of homes in San Francisco, CA – Justin Sullivan | Getty Images]
