So far this year, average mortgage rates have stayed stubbornly high, bouncing between 6.5% and 7%, as financial markets weigh the risks of both higher inflation and an economic slowdown. Most homeowners, unable to save money by refinancing, are holding out for bigger rate drops.

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