Mortgage Applications Jump as Rates Ease for a Second Week in a Row

May 8, 2025

Sam Kornick

Colorado, Minnesota, National, North Carolina, Oklahoma, Oregon

Mortgage loan applications increased 11% from a week earlier—representing both home purchases and refinancing.

The refinance index also increased 11% from the prior week and was 51% higher than the same week one year ago, according the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

"An increase in mortgage applications is somewhat surprising but altogether positive news," says Hannah Jones, senior economic research analyst for Realtor.com®. "Mortgage rates have drifted lower over the last few weeks, and eager buyers are taking advantage. With more affordable inventory on the market, some buyers are making their move this spring. Mortgage applications were up an impressive 51% from the same week one year ago as mortgage rates registered almost a half-percentage point lower. This result is surprising given rising concerns over personal financial situations, but points to pent-up buyer demand due to widespread unaffordability."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.84% from 6.89%.

Federal Housing Administration loans, or FHA loans, fell to 6.56% from 6.61% for the average contract interest rate for a 30-year fixed mortgage. With points, it increased to 0.87 from 0.86 for 80% LTV loans (loan-to-value loans).

LTV loans compares the amount a person is financing with the appraised value of the property.

The average contract interest rate for a 15-year fixed mortgage remains the same as the week prior at 6.17%. With points, it decreased from 0.65 to 0.76 for 80% of LTV loans.

Loans with a 5/1 ARM (adjustable rate mortgage) increased to 5.97% from 5.89%.

"More buyers took the opportunity to refinance last week as rates continued to ease. Mortgage rates are higher than a month ago but are roughly a half-point lower than one year ago, driving buyers who bought in at a higher rate to refinance," Jones says. "Mortgage rates have been above 6.5% for most of the last two years. Last spring's buyers saw rates near or above 7%, which means many may see some advantage from refinancing this year."

The new numbers are for the week ending May 2, 2025. The MBA survey focuses on U.S. closed-end residential mortgage applications through retail and consumer direct channels.

Mortgage rates dip

The mortgage application numbers for this week come on the heels of mortage interest rates dipping for the second straight week ending May 1. The average rate on a 30-year fixed home loan is 6.76%, down from the prior week of 6.81%, according Freddie Mac.

For perspective, rates averaged 7.22% the same week in 2024.

The latest decline in the Freddie Mac rate is a positive sign, but Realtor.com® senior economist Jake Krimmel says it’s too early to celebrate.

Housing market activity saw new listings increasing in April compared to a year ago, but homes are sitting on the market longer.

Mortgage rates calculated

Mortgage rates are calculated by various factors in the economy and the length of your loan will also figure into which mortgage rate you qualify for. The 30-year mortgage rate is benchmarked to the rate of the 10-year Treasury note, according to Fannie Mae. As the rate on the 10-year Treasury note moves, mortgage rates follow.

The rate on the 10-year Treasury note is determined by expectations for shorter-term interest rates in the economy over the duration of a bond, plus a term premium.

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May 8, 2025

Sam Kornick

Colorado, Minnesota, North Carolina, Oklahoma, National, Oregon

Stocks May Be Volatile, but Home Values Aren’t

May 8, 2025

Sam Kornick

Colorado, Minnesota, North Carolina, Oklahoma, National, Oregon

With all the uncertainty in the economy, the stock market has been bouncing around more than usual. And if you’ve been watching your 401(k) or investments lately, chances are you’ve felt that pit in your stomach. One day it’s up. The next day, it’s not. And that may make you feel a little worried about your finances.

But here’s the thing you need to remember if you’re a homeowner. According to Investopedia:

“Traditionally, stocks have been far more volatile than real estate. That’s not to say that real estate prices aren’t ever volatile—the years around the 2007 to 2008 financial crisis are just one memorable example—but stocks are more prone to large value swings.”

While your stocks or 401(k) might see a lot of highs and lows, home values are much less volatile.

A Drop in the Stock Market Doesn’t Mean a Crash in Home Prices

Take a look at the graph below. It shows what happened to home prices (the blue bars) during past stock market swings (the orange bars):

Even when the stock market falls more substantially, home prices don’t always come down with it.

Big home price drops like 2008 are the exception, not the rule. But everyone remembers that one. That stock market crash was caused by loose lending practices, subprime mortgages, and an oversupply of homes – a scenario that doesn’t exist today. That’s what made it so different.

In many cases before and after that time, home values actually went up while the stock market went down, showing that real estate is generally much more stable.

This graph shows how stock prices go up and down (the orange line), sometimes by more than 30% in a year. In contrast, home prices (the blue line) change more slowly (see graph below):

Basically, stock values jump around a lot more than home prices do. You can be way up one day and way down the next. Real estate, on the other hand, isn’t usually something that experiences such dramatic swings.

That’s why real estate can feel more stable and less risky than the stock market.

So, if you’re worried after the recent ups and downs in your stock portfolio, rest assured, your home isn’t likely to experience the same volatility.

And that’s why homeownership is generally viewed as a preferred long-term investment. Even if things feel uncertain right now, homeowners win in the long run.

Bottom Line

A lot of people are feeling nervous about their finances right now. But there’s one reason for you to feel more secure – your investment in something that’s stood the test of time: real estate.