Mortgage applications hit 2-year high as refinancings surge
Mortgage applications have jumped to the highest levels since July 2022, driven by homeowners seeking to refinance their loans as rates drop.
Applications to refinance or purchase a home in the week that ended Sept. 20 rose 11% week over week, according to the Mortgage Bankers Association (MBA). Refinancing applications jumped 20% during that period as more consumers sought to take advantage of falling mortgage rates.
It’s the second consecutive week of double-digit application gains. Refinancings made up nearly 56% of applications as the typical summer homebuying season wraps up, according to the MBA.
“As a result of lower rates, week-over-week gains for both conventional and government refinance applications increased sharply,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
The average rate on a 30-year fixed mortgage dropped steadily over the summer, falling to 6.09% as of Sept. 19, according to Freddie Mac data. That’s down more than a percentage point from a year earlier.
Mike Fitzpatrick, founder and division president of Legendary Mortgage in Myrtle Beach, South Carolina, said he's seen a strong increase in his pipeline in the last three weeks as more consumers are able to qualify for mortgage rates under 6%.
"I think it's more psychological than anything else," Fitzpatrick said.
Refinancing applications were 175% higher than a year ago. The signs of life in the mortgage market follow a slow summer homebuying season that saw many potential buyers stay on the sidelines amid limited inventory and record-high home prices.
Sales of new homes fell 4.7% in August compared to a month earlier.
Read more: Mortgage refinance: How to get started
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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