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.

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.

The average loan size for a refinance application also increased to $313,700 after averaging less than $300,000 for the past six weeks