Mortgage Demand Surges as Rates Dip

After months of sluggish activity, the mortgage market finally caught a break. Last week, mortgage applications jumped nearly 20%—the biggest increase since June 2023. What sparked this sudden rush? A small but meaningful dip in interest rates brought some much-needed energy back into the housing world.

Rates on 30-year fixed mortgages dropped to 7.24%, down from 7.29% the week before. Now that might not seem like a huge difference on paper, but for anyone sitting on the fence, it's enough of a nudge to submit an application. When you’re dealing with home prices and loan amounts where a fraction of a percent translates into hundreds of dollars each month, that drop matters.

The uptick in demand wasn’t just buyers looking to get into new homes. Refinance activity also climbed 10%—a sign that some homeowners are seeing opportunities to improve their terms, even in a relatively high-rate environment. Still, refis are nowhere near where they were during the ultra-low-rate boom a few years back, and that’s not likely to change unless we see a more dramatic shift in rates.

In total, mortgage activity is still down about 10% compared to this time last year. But the recent jump suggests people are paying attention and ready to act when the numbers make sense. And I’ve seen it firsthand—folks who were burned out by high prices and interest rates are starting to peek their heads out again. They're not rushing, but they're definitely watching.

The Mortgage Bankers Association sees this as a promising shift. And if rates continue to ease—or even hold steady—we might see this momentum carry into the spring and summer markets, when housing activity typically heats up.

In summary, I’d say this feels less like a full-blown recovery and more like a test balloon. But even small signs of life are encouraging, especially for buyers who’ve been sidelined and sellers waiting for signs of buyer interest to return.