The number of mortgage refinancings increased by 35% in just one week, coinciding with the lowest interest rates seen in over a year.

• The interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased slightly from 6.55% to 6.54%.
• The percentage of mortgage applications that involved refinancing rose to 48.6% from 41.7% in the prior week.
• The number of mortgage applications for purchasing a home increased by 3% in the week but was still 8% lower compared to the same week last year.

When mortgage rates dropped dramatically, current homeowners took action after realizing it had taken a few weeks.

The number of applications to refinance a home loan increased by 35% last week compared to the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. This was a significant increase of 118% when compared with the same week one year ago.

Although the average interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased slightly, from 6.55% to 6.54%, the points also decreased from 0.58 to 0.57, including the origination fee, for loans with a 20% down payment.

Although rates decreased by only 1 basis point last week, they had fallen by 33 basis points in the previous four weeks. Additionally, they were 62 basis points lower than the corresponding week a year ago.

Since May 2022, the refinance index has experienced its strongest week, thanks to increases in conventional, FHA, and VA applications, according to Joel Kan, an MBA economist.

Despite a slight increase of 3% in mortgage applications for purchasing homes during the week, they were still 8% lower compared to the same week last year. Homebuyers are currently facing challenges such as high home prices, low supply, and high interest rates. Some buyers, according to agents, are holding off on making a large purchase due to the belief that mortgage rates may decrease even further.

The percentage of mortgage applications that involved refinancing rose to 48.6% from 41.7% in the previous week, while it was only 29% one year ago.

The Consumer Price Index (CPI) could cause a change in essentially flat mortgage rates this week.

Matthew Graham, chief operating officer at Mortgage News Daily, wrote that it is impossible to predict whether data will be beneficial or harmful, but CPI has been responsible for significant spikes and drops in recent years.