Nearly 60% of mortgage applications were for refis, the highest share since January 2022
Mortgage rates continued their late-summer descent this week, with the average 30-year fixed-rate mortgage falling to 6.26%—its lowest level since October 2024, according to Freddie Mac’s latest Primary Mortgage Market Survey. The drop has triggered a wave of refinancing, with nearly 60% of mortgage applications now for refis, the highest share since January 2022.
The 30-year FRM averaged 6.26% as of September 18, down from 6.35% last week and 6.09% a year ago. The 15-year FRM also slipped, averaging 5.41%, compared to 5.50% last week and 5.15% a year earlier.
Refinance activity surges as rates drop
Mortgage rates have been declining since late July, tracking a drop in long-term US Treasury yields and expectations that the Federal Reserve would cut rates for the first time since 2024. As anticipated, the Fed delivered a quarter-point cut this week and signaled two more reductions by year-end, citing concerns about the US job market.
The Mortgage Bankers Association reported that overall mortgage applications jumped nearly 30% last week, with refinances accounting for the lion’s share. Demand for adjustable-rate mortgages (ARMs) also climbed, making up about 13% of all loan applications—the highest proportion since 2008.
"The continued, swift decline in mortgage rates is fueling increased borrower demand. Mortgage applications surged nearly 30 percent last week, led by a 58 percent jump in refinances. Prospective homebuyers also acted on lower rates, with activity up solidly last week and compared to a year ago," Bob Broeksmit, MBA president and CEO, said.
Market outlook and industry implications
The late-summer slide in rates has offered some relief to a housing market that has struggled since 2022, when borrowing costs began climbing from historic lows. Sales of previously owned homes fell last year to their lowest level in nearly three decades and have remained sluggish in 2025 as rates hovered above 6.5%. While the recent drop may spur some activity, industry analysts caution that most homeowners remain locked into lower rates, limiting the pool of potential sellers.
Looking ahead, mortgage rates will likely remain sensitive to movements in Treasury yields and further Fed policy decisions. “It certainly piqued interest in the number of people who are considering refinancing or getting back into the purchase market. People read these headlines that mortgage rates are at the lowest level they've been in two years, and they expect me to tell them that the rate is 4% but that's just not where we are," Melissa Cohn, regional vice president of William Raveis Mortgage, told Mortgage Professional America.
"I keep telling people the Fed cutting rates doesn't mean that mortgage rates will go down. Mortgage rates move on economic data, and the bond market is now saying, ‘Ho hum, basically...’ The door is not wide open for many more cuts. Certainly not a bigger cut than a quarter-point cut."
