Significant Increase in Mortgage Applications

In a remarkable upturn, mortgage applications in the United States have surged by 20.4% for the week ending February 28. This data, released by the Mortgage Bankers Association (MBA) in their Weekly Mortgage Applications Survey, highlights a significant shift in the housing market dynamics.

Interest Rates Drop

Accompanying this surge, the average contract interest rate for 30-year fixed-rate mortgages has seen a decrease, moving down to 6.73% from 6.88% in the previous week. This reduction in interest rates is a pivotal factor contributing to the increased mortgage applications.

Purchase and Refinance Indicators Rise

The purchase indicator has shown a modest increase of 0.2 points from the previous week, reaching 144.5. More strikingly, the refinance index has leaped to 784.2 from 572.5, indicating a robust refinancing activity among homeowners.

Joel Kan, an MBA economist, expressed optimism, stating, "This is a period where we typically see purchase activity ramp up and purchase applications were up over the week and continued to run ahead of last year’s pace, more green shoots as we head into the spring homebuying season."