Mortgage applications surged in the week ended Sept. 12, as mortgage rates fell to their lowest level in 11 months ahead of an expected rate cut by the Federal Reserve, the Mortgage Bankers Association said.  

The MBA’s Market Composite Index, which includes fixed and adjustable-rate purchase and refinance mortgages, jumped 29.7% from the previous week, while the Refinance Index ballooned 58% week over week, and the Purchase Index climbed 3%.  

“Indicative of the weakening job market, and in anticipation of a rate cut from the Federal Reserve, mortgage rates last week dropped to their lowest level since last October, with the 30-year fixed rate declining to 6.39%,” MBA Chief Economist Mike Fratantoni said. “Homeowners responded swiftly, with refinance application volume jumping almost 60% compared to the prior week. Homeowners with larger loans jumped first, as the average loan size on refinances reached its highest level in the 35-year history of our survey.” 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.39% from 6.49%, while the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.14% from 6.27%.