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It appears to have taken a few weeks for current homeowners to realize mortgage rates had dropped dramatically. And when they did, they acted. Applications to refinance a home loan surged 35% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. They were up a whopping 118% when compared with the same week one year ago. This, even though the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) fell very slightly, to 6.54% from 6.55%, with points decreasing to 0.57 from 0.58 (including the origination fee) for loans with a 20% down payment. While rates dropped just 1 basis point last week, they were down 33 basis points in the past four weeks. They were also 62 basis points lower than the same week a year ago. “The refinance index also saw its strongest week since May 2022,…