Total mortgage application volume jumped 20.4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Mortgage rates on FHA loans dipped to 6.42% and refinance activity saw its fastest pace since October 2024, the MBA reported.

Mortgage demand for purchases was up 12%, and refinancing rose 37% from last week as rates dropped to their lowest levels since December.

"This week, mortgage rates decreased to their lowest level in over two months," says Freddie Mac Chief Economist Sam Khater. "The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home."

US mortgage rates declined last week to an almost three-month low, sparking lending activity for home refinancing and purchases in a welcome sign for the struggling housing market.