Lower rates pulled sidelined borrowers back into the market – for now
Weekly mortgage demand surged last week as borrowers tried to lock in rates that fell below 6%, their lowest levels since 2022, although it remains to be seen how long that trend will last amid recent geopolitical turmoil.
Total application volume rose 11% for the week ending February 27, 2026, on the Mortgage Bankers Association’s seasonally adjusted index, with refinance activity again doing most of the heavy lifting.
The average contract rate for 30‑year fixed mortgages with conforming balances of $832,750 or less held at 6.09%, the lowest level since 2022 and roughly 64 basis points below where it stood a year earlier.
Applications to refinance jumped 14.3% week over week and were 109% higher than the same week in 2025, while purchase applications climbed 6.1% and sat 10% above last year’s level.
Refinance momentum hit multi‑year highs
“Mortgage applications increased last week, driven by continued strength in refinance activity, as mortgage rates stayed near their lowest level since 2022,” said Joel Kan, MBA’s vice president and deputy chief economist.
“Refinance applications increased for the fourth straight week to the strongest pace since 2022, with conventional refinances up 20%. The increase in the average loan size for refinances indicates that more borrowers with larger loan sizes are seeking to lower their monthly payments.”
“Purchase applications also moved higher, with the week’s pace almost 10% ahead of last year’s pace, as lower rates and growing levels of housing inventory continue to support homebuyer interest,” Kan said.
Purchases improved but affordability still pinched
On the purchase side, the gain in applications suggested early strength heading into the spring selling season, but not a full‑fledged recovery.
The share of adjustable‑rate mortgages rose to 8.8% of total activity, reflecting payment‑sensitive borrowers reaching for slightly lower initial costs.
Government‑backed lending shifted modestly, with FHA’s share slipping to 15.8% and VA’s to 17.1%, while USDA business held at 0.4%.
Even with more listings trickling onto the market, buyers still face elevated prices and broader economic uncertainty. In February, refinance‑driven surges coexisted with softer purchase demand as many would‑be buyers remained constrained by affordability and thin inventory.
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