Mortgage Refinance Applications Surge Amid Rate Cuts

Mortgage applications reached a two-year high last week, driven by a significant surge in refinancing activity as homeowners took advantage of declining mortgage rates. The Mortgage Bankers Association (MBA) reported an 11% increase in overall mortgage applications and a 20% jump in refinance applications for the week ending September 20. The average interest rate for 30-year fixed-rate mortgages dropped to 6.13%, marking the eighth consecutive week of declines. Joel Kan, MBA's vice president and deputy chief economist, noted that both conventional and government refinance applications saw sharp increases due to the lower rates. Despite the surge in refinancing, home purchase applications only saw modest growth. The Federal Reserve's recent rate cut has been a key factor in the recent refinancing boom.