Interest rates in the United States have hit their lowest level since last October as home loans surged last week.
Mortgage Bankers Association data found that the 30-year fixed mortgage rate for conforming loan balances, US$806,000 or less, declined for a second week to 6.49% in the week ending 5 September.
This sent signals to borrowers, who applied for 9% more mortgages than the previous week.
“The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher,” MBA vice president and deputy chief economist Joel Kan said.
“Purchase applications increased to the highest level since July and continued to run more than 20% ahead of last year’s pace.”
The dip in interest rates caused applications to refinance a home loan to jump 12% for the week and 34% higher than the same week a year ago.
The refinance share of mortgage activity increased to 48.8% of total applications from 46.9% the previous week.
“The holiday-adjusted refinance index had its strongest week in a year and the average loan size for refinances also increased significantly, since borrowers with large loans are more sensitive to bigger rate moves,” Kan said.
