The U.S. mortgage market is experiencing a resurgence not seen in years, as a sharp drop in borrowing costs prompted a wave of refinancing activity ahead of the Federal Reserve’s widely expected interest rate cut—signaling that homeowners aren’t waiting for policy confirmation to lock in savings.
During the week ending Sept. 12, total mortgage application volume jumped 29.7% from the prior week, according to new data from the Mortgage Bankers Association (MBA).
That’s the largest weekly gain since January and the second-sharpest increase since the historic rate collapse during the COVID-19 crisis in March 2020.
Refi Frenzy Breaks Out as Mortgage Rates Fall
The surge coincided with a notable 10 basis point drop in the benchmark 30-year fixed mortgage rate, which fell to 6.39%, the lowest level in nearly a year. Refinancing activity led the wave, with the MBA’s Mortgage Refinance Index skyrocketing 57.7% to 1,596.7, from 1,012.4 the week prior—its highest reading since March 2022.
According to MBA chief economist Mike Fratantoni, this move shows borrowers are moving ahead of monetary policy in anticipation of lower rates.
“Homeowners responded swiftly, with refinance application volume jumping almost 60 percent compared to the prior week,” Fratantoni said.
“Homeowners with larger …