Most mortgage-market observers began the year believing rates were more likely to rise than fall, but that hasn’t panned out. Rates ticked up slightly in early January but have fallen steadily since then in tandem with warning signs about the economy.

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.

Mortgage demand for purchases was up 12%, and refinancing rose 37% from last week as rates dropped to their lowest levels since December.