FX.co ★ US Mortgage Applications Surge on Lower Rates

The volume of mortgage applications in the United States experienced a significant increase of 29.7% from the prior week for the period ending September 12th, marking the most rapid growth rate since January and the second-highest since the significant drop in interest rates seen in March 2020. This data, provided by the Mortgage Bankers Association, coincides with a 10 basis point decrease in benchmark mortgage rates, following a 15 basis point decline the week before, bringing them to their lowest level in almost a year. This decline was fueled by a series of discouraging labor market reports that led to a fall in yields on long-term Treasury securities. Notably, applications for mortgage refinancing, which are particularly sensitive to short-term interest rate changes, surged by 60% from the prior week, with average loan sizes reaching record highs. Conversely, applications for mortgages to purchase new homes increased modestly by 3%.