Home loan applications rose by double digits for the second consecutive week as refinance demand rose to its highest level since September last week, according to new figures from the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage application volume, rose 14.1% on a seasonally adjusted basis over the week ending Jan. 16, posting a 17% rise when not accounting for seasonal factors. The index rose 28% over the week ending Jan. 9.

Strong mortgage application activity to start the year has been fueled by lower mortgage rates, which the MBA says hit their lowest level since September 2024 last week. Refinance activity has jumped as rates have fallen.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 6.16% from 6.18%, 6.25% and 6.32% over the preceding four weeks, per MBA data, while average rates for a 30-year fixed-rate loan insured by the Federal Housing Administration (FHA) dropped to 6.04% from 6.08%, 6.09% and 6.15% over the same period.

“These lower rates prompted greater refinance activity from conventional and VA refinance borrowers,” said Joel Kan, deputy chief economist at the MBA, in commentary accompanying Wednesday’s data release, referring to mortgages backed by the U.S. Department of Veterans Affairs.

The refinance component index rose 20% from the previous week and was 183% higher than the same week one year ago.

While refinances comprised nearly 62% of total application volume last week, purchase demand has crawled back, too, in recent weeks. Purchase applications rose 5% over the week ending Jan. 16 to land 18% higher than the same week last year, on an unadjusted basis. Purchase activity was 13% higher than a year ago over the previous week.

The share of applications for FHA-backed mortgages slipped to 15.9% from 19.2% the previous week, while the share of applications for VA-backed mortgages stayed essentially flat at 16.2% from 16.1% the week prior.