Refinancing and purchase activity climbed as rates fell again
United States mortgage rates dropped to their lowest level in over a year, sparking a notable uptick in both refinancing and home purchase applications, according to the latest data from the Mortgage Bankers Association (MBA).
The average contract rate for a 30-year fixed mortgage fell to 6.3% in the week ending October 24, 2025, down from 6.37% the previous week. This marks the fourth consecutive week of declines and the lowest point since September 2024.
"This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications,” said Joel Kan, MBA’s vice president and deputy chief economist.
“The ARM share of applications, which had been trending higher, dipped below 10 percent last week, as lower rates prompted more borrowers to choose fixed rate loans. Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements. Purchase applications increased compared to a holiday-shortened week across most loan types. However, USDA applications fell more than 26 percent, impacted by the ongoing government shutdown.”
The MBA’s Market Composite Index, which tracks mortgage loan application volume, rose 7.1% on a seasonally adjusted basis from the prior week. The Refinance Index jumped 9%, reaching a level 111% higher than the same period last year, while the Purchase Index climbed 5% week-over-week and 20% year-over-year.
The refinancing share of mortgage activity rose to 57.1% of total applications, up from 55.9% the previous week. Adjustable-rate mortgage (ARM) activity dropped to 8.9%.
The drop in mortgage rates could help revive a housing market that has been sluggish for much of the past year. Recent data from the National Association of Realtors indicated a rise in existing home sales in September, and economists anticipate further gains in contract signings as lower rates improve affordability.
Speaking at the AIME Fuse event, United Wholesale Mortgage CEO Mat Ishbia encouraged brokers to act now, stressing that waiting for even lower rates means missing opportunities. https://t.co/yfhEN7I8AM
— Mortgage Professional America Magazine (@MPAMagazineUS) October 27, 2025
The MBA’s survey, which covers more than 75% of all US retail residential mortgage applications, has tracked these shifts since 1990.
While the average loan size for refinances remains high, the overall increase in applications signals renewed interest from both homeowners and prospective buyers.
However, the sustainability of this momentum will depend on whether rates remain low and if broader economic conditions continue to support consumer confidence.
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