Mortgage applications increased 20.4% from one week earlier on a seasonally adjusted basis as buyers pounced on lower rates, according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending Feb. 28, 2025.
On an unadjusted basis, applications increased 22% compared with the previous week. The refinance index increased 37% from the previous week and was 83% higher than the same week one year ago.
The seasonally adjusted purchase index increased 9% from last week and, on an unadjusted basis, increased 12% compared with last week and was 2% higher than the same week one year ago.
“Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S. Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024. At 6.73%, the rate is now at its lowest level since December 2024,” said Joel Kan, MBA’s vice president and deputy chief economist.
Kan added that the FHA rate dipped to 6.42% and refinance activity saw its fastest pace since October 2024. “Conventional refinance applications rose 34% and government refinance applications increased by 42% over the week. The move in government refinances was driven by a 75% increase in VA loans, which have been prone to large changes in recent months,” he shared.
Continued Kan, “This is a period where we typically see purchase activity ramp up and purchase applications were up over the week and continued to run ahead of last year’s pace, more green shoots as we head into the spring homebuying season.”
The refinance share of mortgage activity increased to 43.8% of total applications from 38.9% the previous week, while the adjustable-rate mortgage (ARM) share of activity increased to 5.8% of total applications.
Despite rates dipping, the FHA share of total applications decreased to 16.7% from 17.4% last week. The VA share of total applications increased to 14.6% from 13.4% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.
The average interest rate for a 30-year fixed-rate mortgage shrunk down to 6.73%, while the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances also saw a decrease to 6.83% from 7.00%
Both 15-year fixed-rate mortgages and 5/1 ARMs saw rate decreases to 6.12% from 6.25% and 5.85% from 6.05%, respectively.
