Report Shows Mortgage Rates Dropped and Increased Number of Borrowers

Last week saw a 2.6% increase in mortgage applications, fueled by a decrease in borrowing costs after three consecutive weeks of rising rates. The average 30-year fixed-rate mortgage dropped to 7.18% by the end of the week.

The drop in rates was attributed to a slowing job market, with wage growth at its slowest pace since 2021, according to Mike Fratantoni, MBA senior vice president and chief economist. This news led to a decrease in Treasury rates and mortgage rates.

Applications for Federal Housing Administration (FHA) loans also saw a 5% increase, contributing to a 2% rise in purchase activity. FHA-backed 30-year fixed-rate mortgages were down to 6.92%, marking a decrease for the first time in three weeks. These government lending programs are crucial for first-time homebuyers, who make up about half of purchase loans.

Additionally, there was a 5% increase in homeowners looking to refinance their loans, as indicated by the MBA data. Mortgage refinancing continues to be popular among homeowners seeking to take advantage of lower interest rates.