Following a run of home purchase application declines in recent weeks, the Mortgage Bankers Association (MBA) is reporting a surge in these as well as refinance applications following a plunge in the average mortgage rate that resulted from a host of recent market uncertainties.
According to MBA’s latest Weekly Mortgage Applications Survey for the week ending Feb. 28, 2025, the Market Composite Index (a measure of mortgage loan application volume) increased 20.4% from the previous week’s 1.2% decline. On an unadjusted basis, the Index increased 22% compared with the previous week.
“Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S.,” said Joel Kan, MBA’s vice president and deputy chief economist. “Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024. At 6.73%, the rate is now at its lowest level since December 2024.
“Additionally, the FHA rate dipped to 6.42%,” Kan also noted. “Refinance activity was at its fastest pace since October 2024, as conventional refinance applications rose 34% and government refinance applications increased by 42% over the week. The move in government refinances was driven by a 75% increase in VA loans, which have been prone to large changes in recent months.”
This week’s survey also saw the Refinance Index increase 37% from the previous week and was 83% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 9% from one week earlier. The unadjusted Purchase Index increased 12% compared with the previous week and was 2% higher than the same week one year ago.
“Purchase activity typically ramps up this time of year and did last week, continuing its run ahead of last year’s pace,” Kan added. “These are more green shoots as we head into the spring homebuying season.”
Also notable this week: MBA reported the refinance share of mortgage activity increased to 43.8% of total applications from 38.9% the previous week, and the adjustable-rate mortgage (ARM) share of activity increased to 5.8% of total applications.
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