Mortgage applications hit 2-year high as refinancings surge

Updated Wed, Sep 25, 2024, 8:55 AM 1 min read

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.