Refinance demand surges 16% weekly as mortgage rates reach 1-year low

Mortgage interest rates hit their lowest level since May 2023, prompting a surge in demand for mortgages from both homebuyers and current homeowners. The average interest rate for 30-year fixed-rate mortgages dropped to 6.55%, with points falling to 0.58. Applications to refinance increased by 16%, while applications for home purchases only rose by 1%. Despite the rate drop, purchase activity saw only slight gains. Mortgage rates continued to fall at the start of the week, but rose again after positive economic data was released. The increase in demand for refinancing may be limited as most borrowers today already have rates below 5%. The small increase in purchase applications suggests that potential homebuyers may be waiting for even lower rates before entering the market. The rise in for-sale inventory in some parts of the country could also be influencing buyer behavior. Overall, the decrease in rates has led to increased mortgage activity, but the impact on the housing market remains uncertain.

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