WASHINGTON—A brief decline in mortgage rates prompted a surge in what has to date been a slow market for home loans.

Total mortgage application volume jumped 9.4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Last week’s results included an adjustment for the July Fourth holiday.

According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.77% from 6.79%, with points holding steady at 0.62, including the origination fee, for loans with a 20% down payment. That was the lowest level in three months, the MBA data show.

Refi Apps Rise

Meanwhile, applications to refinance a home loan rose 9% for the week and were 56% higher than the same week one year ago. Refinance demand has been weak because mortgage rates were stuck at relatively high levels for a extended period of time.

The MBA reported applications for a mortgage to purchase a home also rose 9% for the week and were 25% higher than the same week one year ago.

“Homebuyer demand is being fueled by increasing housing inventory and moderating home-price growth,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “The average loan size on a purchase application, at $432,600, was at its lowest since January 2025.”

Mortgage rates actually began ticking up again just before the July Fourth holiday, and are up again this week so far, according to a survey from Mortgage News Daily.