Consumers returned from the holiday season to find mortgage rates at their lowest point since September, and they are responding in dramatic fashion.

Mortgage application volume jumped nearly 28% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.23% from 6.42%, with points falling to 0.67 from 0.73 (including the origination fee) for loans with a 20% down payment.

Rates hit a recent high of around 7.2% at the end of October on the MBA’s survey but ended the year at 6.58%. One year ago, the average rate on the 30-year fixed was 3.64%.

Refinance demand made the biggest move, up 34% from the previous week, but it was still 81% lower than the same week one year ago. The refinance share of mortgage activity increased to 31.2% of total applications from 30.7% the previous week.

Applications for a mortgage to purchase a home rose 25% week to week but were 35% lower than the same week one year ago.

“As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers,” said Mike Fratantoni, senior vice president and chief economist at the MBA.

The market, however, is not seeing any surge in inventory. The number of active listings is about 21% higher than it was a year ago, according to Redfin, a real estate brokerage. That is mostly because homes are now sitting on the market longer, with far fewer sales. New listings of homes for sale are down 22% year over year.