Americans saw a chance to save a few dollars on their monthly mortgage payments and took it, pushing refinance applications up 40% versus a year ago.

However, after cutting interest rates three times last year, the Fed has held rates steady in 2025 to observe how President Trump’s policies on trade, immigration and government spending will affect the economy. The central bank is expected to resume cutting rates as early as September, but this will not immediately result in lower mortgage rates.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 6.79% from 6.88% Applications to refinance a home loan rose 7% last week compared with the previous week.