Refinance Market Experiences Nearly 10% Growth in July 2025
San Diego, Wednesday, 9 July 2025.
Rate and term refinancing activities surged by 9.89% amid stable purchase activity, reflecting a positive consumer response to favorable interest rates and job market conditions.
Analysis of Refinance Market Trends
The Mortgage Capital Trading’s (MCT) July Lock Volume Indices reveal a significant increase in rate and term refinancing activities, which surged by 9.89% in July 2025. This growth reflects consumer adaptation to lower interest rates and a stable employment market [1]. The economic conditions are benefiting from a robust jobs report released on 5 July 2025, which showed an addition of 147,000 non-farm payroll jobs [1]. This positive employment data has played a significant role in maintaining consumer confidence in mortgage borrowing [1].
Implications for the Broader Economy
Despite the increase in refinance volumes, broader economic uncertainties persist due to inflation and the timing of Federal Reserve policy decisions. The Federal Reserve’s previous rate cuts, designed to stimulate borrowing by lowering interest rates, have not led to any dramatic reduction in mortgage rates, which remain around the 6.5% to 7% range [2]. Nevertheless, the possibility of a further rate cut later this quarter might provide some relief to the housing market, making refinancing more attractive if rates fall considerably [3]. Notably, financial experts suggest that refinancing is only advantageous if new rates are at least 1% lower than existing mortgage rates [2].
Current Refinance Rates and Market Sentiments
As of 9 July 2025, the average national refinance rates hover around 6.86% for a 30-year fixed APR and 6.23% for a 15-year fixed APR, according to Bankrate’s survey [4]. These rates are higher than those seen during the pandemic but lower than the peak experienced in late 2023, which reached 8% [4]. Market observers anticipate that if refinances become more cost-effective, refinancing activity could see another surge. Programs such as ‘Refi Now’ and ‘Refi Possible’ continue to offer refinancing opportunities for those whose mortgages are purchased by Fannie Mae or Freddie Mac, offering some reprieve for homeowners facing high current rates [5].
Future Outlook and Economic Considerations
The upcoming Consumer Price Index (CPI) release is expected to be another major economic indicator impacting market conditions. Current economic forecasts suggest modest improvements in housing affordability due to Federal Reserve decisions on interest rates [3]. However, homeowners are urged to weigh refinancing costs carefully, as these can range from 2% to 6% of the loan amount, affecting overall savings [5]. Refinancing decisions also depend on changes in mortgage types, such as moving from a variable rate to a fixed rate to ensure predictable payments [5]. Overall, careful monitoring of rate changes and economic indicators remains crucial for homeowners considering refinancing options.