Mortgage rates have continued to increase, with the average contract interest rate for 30-year fixed-rate mortgages rising to 6.65%, the highest level since August 2025. This increase has led to an 8.5% decline in total mortgage application volume, as both current homeowners and potential buyers are pulling back.
Refinance applications were particularly affected, decreasing by 18% week-over-week, although they remain 19% higher than the same week last year. Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association (MBA), noted that conventional refinances fell by 14%, FHA applications by 18%, and VA applications by 34%.
The share of refinance applications has dropped to 38%, the lowest since June 2025. Meanwhile, mortgage applications for home purchases saw a slight decline of 0.4%, but the average loan size for these applications reached a record high of $473,600, indicating that borrowers with smaller loans are less active due to the higher rates affecting their purchasing power.
As the week began, mortgage rates showed a slight decrease, influenced by a potential easing of tensions in the Middle East, which led to lower bond yields