"Mortgage rates dropped lower last week following the announcement of increased MBS purchases by the GSEs. Lower rates, including the 30-year fixed rate declining to 6.18%, sparked an increase in refinance applications, said Joel Kan, MBA's vice president and deputy chief economist. Compared to a holiday-adjusted week, refinance applications surged 40% to the strongest weekly pace since October 2025. The average loan size for refinance applications was also higher, as borrowers with larger loan sizes are typically more sensitive to changes in rates."
"Added Kan, Purchase applications also jumped last week and were 13% ahead of last year's pace, as lower rates and higher inventory kept potential homebuyers active in the market. The refinance share of mortgage activity increased to 60.2% of total applications from 56.6% the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity increased to 7.0% of total applications."
Refinance activity rose sharply, with the refinance index up 40% from the prior week and 128% year-over-year. Seasonally adjusted purchase activity increased 16% week-over-week; the unadjusted purchase index climbed 51% from the previous week and 13% year-over-year. Mortgage rates fell after GSEs increased MBS purchases, with the 30-year fixed rate declining to 6.18%, triggering a 40% surge in refinance applications and higher average refinance loan sizes. Purchase applications were 13% ahead of last year. The refinance share grew to 60.2%, ARM share rose to 7.0%, FHA and VA shares declined, USDA unchanged; conforming rates fell while jumbo rates rose.
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