Why homebuyers are rushing back sooner than expected

Core Insights - Mortgage rates have recently decreased, leading to a surge in mortgage applications, benefiting current homeowners [1][2] - The Mortgage Bankers Association (MBA) reported a 9.2% increase in loan applications on a seasonally adjusted basis from the previous week, with refinancing applications up 12% and 34% higher than the same week last year [1][3] Mortgage Rate Trends - The 30-year fixed-rate mortgage has dropped to 6.49%, the lowest since October of the previous year, indicating a weakened labor market [2] - The downward trend in rates has resulted in the highest borrower demand since 2022, with purchase applications at their highest level since July, over 20% ahead of last year's pace [3] Refinancing Insights - The holiday-adjusted refinance index experienced its strongest week in a year, with refinance applications making up nearly 49% of all applications last week [4] - The average loan size for refinances has increased significantly, as borrowers with larger loans are more sensitive to rate changes [4] Homebuyer Sentiment - A recent survey indicated that by Q3 2025, 52% of homeowners are willing to accept a mortgage rate up to 6.0% for their next purchase, up from 41% in Q1 2025 [4] - Despite the positive news, the current 30-year fixed rate is still 20 basis points higher than a year ago, reflecting ongoing market challenges [5]