Mortgage interest rates rose to 6.78% for 30-year fixed-rate mortgages, marking the highest level in three weeks. This increase contributed to a 1% drop in total mortgage application volume, as reported by the Mortgage Bankers Association.
Refinancing applications fell by 2% and were down 17% compared to the same week last year, indicating a significant slowdown in this segment, particularly for FHA and VA loans. Joel Kan, vice president and deputy chief economist at the MBA, noted that the average loan size for refinances is at its lowest since June 2025.
Additionally, home mortgage applications decreased by 0.3% week-over-week and were 5% lower than the same week a year ago. The overall market is experiencing less competition, which may lead sellers to be more open to buyers who require financing. Despite the current high rates, a separate report from Realtor.com indicates that fewer buyers are using all cash.
However, there is some relief as mortgage rates have dropped this week due to falling oil prices, which have influenced bond yields that correlate with mortgage rates, according to Matthew Graham, COO of Mortgage News Daily