Reversing four consecutive weeks of declines, mortgage applications jumped last week with notable rises in refinance and purchase activity.

Applications for mortgages rose 7.1% from the week before, according to a survey from the Mortgage Bankers Association (MBA) for the week ending Oct. 24.

The association’s seasonally adjusted and unadjusted purchase indexes increased 5% and 4%, respectively, from the previous week. The unadjusted purchase index was 20% higher than the same week a year ago.

Joel Kan, deputy chief economist at the MBA, attributed the rise in mortgage demand to consecutive weeks of declining mortgage rates easing affordability pressures.

“Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements,” Kan noted in a press release. “Purchase applications increased compared to a holiday-shortened week across most loan types.”

The refinance share of mortgage activity increased to 57.1% of total applications from 55.9% the week prior. The refinance component index increased 9% from the week before and was 111% higher than the same week last year.

After rising to 10.8% of total applications last week, the 5/1 adjustable-rate mortgage (ARM) share declined to 8.9% of total volume last week.

“The ARM share of applications, which had been trending higher, dipped below 10% last week, as lower rates prompted more borrowers to choose fixed-rate loans,” Kan explained.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances declined to 6.3% from 6.37% the week prior, reaching its lowest level since September 2024, according to the MBA.

The average interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration (FHA) remained unchanged at 6.12%, while the average contract interest rate for 5/1 ARMs — whereby a borrower pays a fixed mortgage rate for the first five years of the loan term, after which it adjusts on an annual basis — increased 11 basis points to 5.66%, near levels observed two weeks ago.

The FHA share of applications decreased to 20.5% from 21.8% the previous week, while the share of applications backed by the Department of Veterans Affairs dipped only slightly to 13.4% from 13.5% the week prior.

The share of applications backed by the U.S. Department of Agriculture, which slid from 0.3% to 0.2% over the week, “fell more than 26%, impacted by the ongoing government shutdown,” Kan also said.