Mortgage rates dropped to the lowest rate since October of last year, and that pushed demand even higher last week, after a substantial jump the previous week.

Total mortgage applications rose 11.2% week to week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased last week to 6.67% from 6.73%, with points increasing to 0.63 from 0.60, including the origination fee, for loans with a 20% down payment. The rate was 17 basis points lower than it was the same week one year ago.

“Mortgage rates declined for the sixth consecutive week, with the 30-year fixed rate dropping to 6.67%, the lowest level since October 2024,” said Joel Kan, an MBA economist, in a release.

Applications to refinance a home loan, which are most influenced by weekly rate changes, climbed 16% from the previous week and were 90% higher than the same week one year ago. The vast majority of borrowers today have rates well below what is available today, but those who bought in the last two years, when rates were higher, may now be able to get some savings. The percentage increases are large mainly because the total volume is still quite low.

Applications for a mortgage to purchase a home rose 7% for the week and were 4% higher than the same week one year ago.

“As we enter the spring homebuying season, activity was up across all loan categories. Government purchase applications experienced an 11% increase — helped by the FHA rate dropping to 6.34%. Additionally, average loan sizes were higher, with the purchase loan amount hitting $460,800, the highest in the survey dating back to 1990,” Kan added.

Mortgage rates are essentially flat to start this week, after falling Monday and then rising by the same amount Tuesday, according to a separate survey from Mortgage News Daily. The release of the monthly consumer price index on Wednesday, a key measure of inflation, could send rates more decidedly in either direction.