The weekly number of mortgage applications increased by 2.2% for the week ending Jan. 31, fueled by a major jump in refinancing activity, according to the Mortgage Bankers Association (MBA).

The association’s market composite index, which measures the mortgage loan application volume, registered the increase on a seasonally adjusted basis. On an unadjusted basis, the index increased 19% compared to the previous week, with refinancing increasing 12%, up 17% from the same week a year ago.

The MBA’s seasonally adjusted purchase index decreased by 4% from the week before, but the unadjusted purchase index increased 15% and was 0.2% above the same week one year ago.

Refinance mortgages accounted for 39% of total applications, up from 37.1% from the previous week. Federal Housing Administration (FHA) mortgage loans accounted for 16.2% of loans, down from 16.7% the previous week. Veterans Administration (VA) share of total mortgage applications increased slightly to 13.3% from the previous week’s share of 13.2%.

The week’s average interest rate for 30-year fixed-rate mortgages fell to 6.97% from the previous week’s 7.02%. The average FHA mortgage rate fell to 6.69%, down from 6.72% the week before.

Joel Kan, MBA’s vice president and deputy chief economist, said mortgage rates moved lower for the week of Jan. 31, consistent with lower yields for the 10-year Treasury during the week. He reported that the average loan size increased to $447,300, the highest level since October 2024.

“Mortgage applications responded to these lower rates and were up for the week overall, driven by a 12% increase in refinance applications, which had their strongest week since December 2024,” Kan said in a statement. “Purchase activity had a tougher week, with declines across all loan types. The average loan size for a purchase loan has increased since the start of the year and continued that trend last week, with weaker government purchase activity.”