Mortgage rates plummet, sparking demand recovery

Mortgage rates experienced the largest one-week drop in over a year, leading to a slight increase in mortgage demand after a month of decline. The average contract interest rate for 30-year fixed-rate mortgages decreased, prompting a 2% rise in applications for refinancing and a 3% increase in applications for home purchases. However, compared to the previous year, applications for both refinancing and home purchases were lower. The decline in interest rates has not been sufficient to offset the high prices of homes, which continue to rise due to limited supply.