Mortgage Applications Today: Home Loan Demand Rebounds After Rates Hit Lowest Level in Over a Year

The demand for home loans rebounded with a 7.1% increase for the week ending Oct. 24, according to the Mortgage Bankers Association (MBA). It's a turnaround from a week ago when mortgage applications decreased by 0.3%.

The surge comes as mortgage interest rates dropped to 6.19%, the lowest level in over a year for the week ending Oct. 23, according to Freddie Mac.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 7% compared with the previous week.

The Refinance Index increased 9% from the previous week and was 111% higher than the same week a year ago. The seasonally adjusted Purchase Index increased 5% from one week earlier. The unadjusted Purchase Index increased 4% compared to the prior week and was 20% higher than the same week one year ago.

The refinance share of mortgage activity increased to 57.1% of total applications from 55.9% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.9% of total applications.

The Federal Housing Administration (FHA) share of total applications decreased to 20.5% from 21.8% the week prior. FHA loans are still being processed during the government shutdown, but applicants can expect delays in processing and closings.

The Veterans Affairs share of total applications decreased to 13.4% from 13.5% the week prior. The USDA share of total applications decreased to 0.2% from 0.3% the week prior.

"Mortgage rates decreased for the fourth consecutive week, with the 30-year fixed rate down to 6.30 percent, its lowest level since September 2024," says Joel Kan, MBA’s vice president and deputy chief economist. "This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications."

Contract rates

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.30% from 6.37%, with points decreasing to 0.58 from 0.59 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) decreased to 6.38% from 6.39%, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.  

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 6.12%, with points increasing to 0.73 from 0.72 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.67% from 5.74%, with points decreasing to 0.61 from 0.67 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 5.66% from 5.55%, with points decreasing to 0.51 from 0.62 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. 

“The ARM share of applications, which had been trending higher, dipped below 10 percent last week, as lower rates prompted more borrowers to choose fixed-rate loans. Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements," said Kan.

"Purchase applications increased compared to a holiday-shortened week across most loan types. However, USDA applications fell more than 26 percent, impacted by the ongoing government shutdown."

Mortgage rates calculated

Mortgage rates are calculated by various factors in the economy, and the length of your loan will also figure into the mortgage rate you qualify for.

The 30-year mortgage rate is tied to the yield of the 10-year Treasury note, according to Fannie Mae. As the yield on the 10-year Treasury note moves, mortgage rates follow.

The yield on the 10-year Treasury note is determined by expectations for shorter-term interest rates in the economy over the duration of a bond, plus a term premium.