Total mortgage application volume jumped 20.4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

US mortgage rates declined last week to an almost three-month low, sparking lending activity for home refinancing and purchases in a welcome sign for the struggling housing market.

Mortgage lenders typically use risk-based pricing, which assesses the probability of default based on factors such as credit scores. In states with strong wages and economic stability, a larger portion of the population may be considered lower-risk borrowers. This can result in a lower average mortgage rate for those states.