Home Purchase Application Surge Reflects Declining Mortgage Rates
The latest data from the Mortgage Bankers Association (MBA) reveals a significant uptick in home purchase applications as the real estate market gears up for the spring season. The MBA’s Weekly Mortgage Applications Survey, covering the week ending March 7, 2025, shows a robust increase across all loan types.
Key Findings from the Survey
The Market Composite Index, a critical measure of mortgage loan application volume, saw an impressive rise of 11.2% compared to the previous week, building on an earlier increase of 20.4%. On a non-adjusted basis, the Index climbed by 12% week-over-week.
Declining Mortgage Rates Boost Applications
Joel Kan, the MBA’s vice president and deputy chief economist, noted that mortgage rates have dropped for the sixth consecutive week, with the 30-year fixed mortgage rate settling at 6.67%—the lowest since October 2024. “As a result, applications increased over the week and were up 31% from a year ago,” Kan stated. This has led to a purchase index that is more than 4% higher than last year’s figures, indicating heightened activity across all types of loans.
Refinance Activity Shows Continued Growth
In addition to purchases, the Refinance Index also experienced a substantial rise, up 16% from the prior week, and reflecting a noteworthy 90% increase from the same week in the previous year. The seasonally adjusted Purchase Index increased by 7%, while the unadjusted Purchase Index registered an 8% week-on-week gain, marking a 4% increase compared to 2024.
Government Purchase Applications on the Rise
Kan highlighted that government purchase applications surged by 11%, greatly aided by a reduction in FHA rates, which now sit at 6.34%. Furthermore, the average loan size has reached an historic high, with the purchase loan amount averaging $460,800, the highest recorded since the survey began in 1990.
Trends in Mortgage Activity
- The refinance share of total mortgage applications rose to 45.6%, up from 43.8% the previous week.
- Adjustable-rate mortgage (ARM) applications comprised 7.2% of total activity, indicating a growing interest in variable-rate options.
For those looking to delve deeper into the findings, the full report can be accessed through the MBA’s official channels.
