Mortgage applications jump nearly 10% as rates drop across the board

Lower mortgage rates prompted mortgage applications to increase 9.2% from one week earlier, according to data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Sept. 5. Last week’s results include an adjustment for the Labor Day holiday.

On an unadjusted basis, the index decreased 3% compared with the previous week. Applications reversed course from the prior week’s data, when they dropped in reaction to only a slight change in mortgage rates.

The refinance index increased 12% from the previous week and was 34% higher than the same week one year ago. Meanwhile, the share of refinance activity increased to 48.8% of all applications — up from 46.9% the previous week.

The seasonally adjusted purchase index increased 7% from one week earlier. The unadjusted purchase index decreased 6% compared with the previous week and was 23% higher than the same week one year ago.

“Mortgage rates declined for the second consecutive week as Treasury yields moved lower on data indicating that the labor market is weakening. The 30-year fixed rate decreased to 6.49%, down 20 basis points over the past two weeks to the lowest since October 2024,” said Joel Kan, MBA’s vice president and deputy chief economist.

“The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher. Purchase applications increased to the highest level since July and continued to run more than 20% ahead of last year’s pace. There was also a pickup in ARM applications, both in terms of level and share, as ARM rates were considerably lower than fixed-rate loans, which typically benefits homebuyers.”

By product activity, the adjustable-rate mortgage (ARM) share of activity increased to 9.2% of total applications.

The Federal Housing Administration (FHA) share of applications decreased to 18.5%, down from 19.9% the week prior, while the U.S. Department of Veterans Affairs (VA) share increased to 15.3%, up from 13.8%. The U.S. Department of Agriculture share increased from 0.5% to 0.6% during the week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) dropped 15 basis points to 6.49%. The average contract rate for 30-year fixed loans with jumbo balances (greater than $806,500) dropped 14 bps to 6.44%.

Rates for 30-year fixed mortgages backed by the FHA moved 4 bps lower to 6.27%, while rates for 15-year fixed mortgages were down 14 bps to 5.70%. Rates for 5/1 ARMs decreased from 5.90% to 5.77% during the week.