Mortgage market rebounds as rates drop to 5-month low

The mortgage market is enjoying a break from larger economic woes. 

The industry saw overall application volume rise 11.2% last week compared to the seven days prior, the Mortgage Bankers Association reported. Both purchase and refinance customers enjoyed more rate declines, including an average 30-year fixed-rate mortgage falling six basis points to 6.67%, its lowest level since October 2024. 

Economic uncertainty stemming from President Trump’s tariff directives have hammered Wall Street, including stocks of publicly traded mortgage lenders. The 10-year treasury is subsequently sitting in the lower 4.3% range, giving mortgage rates an opening moreso for homeowners holding higher rates. 

The MBA’s Refinance Index was up 16% from the week-ago period and 90% higher than the same time a year ago, it reported. Purchase application volume hasn’t been as hot, but was up 7% from the end of February. 

“Additionally, average loan sizes were higher, with the purchase loan amount hitting $460,800, the highest in the survey dating back to 1990,” said Joel Kan, the MBA’s vice president and deputy chief economist, in a press release. 

Market players dealing with a frigid housing market have already been extending more credit to consumers, as investors had a greater appetite for cash-out refis and adjustable-rate mortgages. The share of ARMs last week rose to 7.2%, and their average contract interest rate fell four basis points to 5.81%. 

Applications were near-even for Federal Housing Administration-backed and Department of Veterans Affairs-sponsored mortgages last week. The average FHA 30-year rate dropped 8 basis points to 6.34%. 

The effective rate for other products tracked by the MBA also faded. The 15-year FRM is inching closer to the 6% barrier, declining 8 basis points to 6.04%. Borrowers for jumbo loans above the $806,500 conforming loan limit also enjoyed greater relief, with rates pulling back 15 basis points to 6.68%.