US Mortgage Applications Surge on Rate Drop
Wednesday 9th July 2025 – 14:35 (BST)
US mortgage applications surged last week as interest rates fell to their lowest levels since April, reviving activity in a housing market that has remained subdued for much of the year. The Mortgage Bankers Association reported a 9.4% weekly increase in total applications – the strongest rise in four weeks and the third consecutive gain.
Refinancing activity, which is highly sensitive to rate changes, rose 9% on the week and is now up 56% from a year earlier. Purchase applications also increased 9% and are 25% higher than the same period in 2024, suggesting that lower rates are drawing some buyers back into the market.
The shift reflects growing market expectations that the Federal Reserve will begin cutting interest rates later this year, which has driven down Treasury yields and eased borrowing costs across the board.
USD demand softened modestly amid falling yields, enhancing affordability for foreign buyers and potentially lowering the cost of imported building materials. However, with housing supply still tight in many regions, the rebound in mortgage activity is likely to put upward pressure on prices – a dynamic that could complicate the Fed’s efforts to bring housing inflation under control.