WASHINGTON, DC — Mortgage borrowing got a little more expensive last week, and demand softened again. The Mortgage Bankers Association said total mortgage application volume fell 1% from the prior week on a seasonally adjusted basis, even as the broader housing market kept showing signs of hesitation.
The trade group’s measure showed the average contract rate on 30-year fixed mortgages with conforming loan balances up to $832,750 rose to 6.78% from 6.77% the week before. Points also edged higher, to 0.66 from 0.65, including the origination fee for borrowers making a 20% down payment. MBA said that was the highest level in three weeks.
Refinances And Purchases
Refinance applications were the weakest part of the market, dropping 2% for the week. They were also 17% below the same week a year earlier, when rates were 9 basis points lower. Joel Kan, MBA’s vice president and deputy chief economist, said refinance demand fell especially for FHA and VA loans, and said the average refinance loan size was at its lowest since June 2025.
Purchase applications slipped 0.3% week over week and were 5% lower than a year ago. Kan said purchase activity was down over the week because FHA applications fell 7%, and added that the purchase market has slowed over the past two months. A separate Realtor.com report also said fewer buyers are paying all cash, which can leave more room for financed offers in a less competitive market.
What Is Driving It
The week-to-week move was small, but it kept borrowing costs near a recent high and continued the pressure on demand. MBA’s numbers suggest consumers are still sensitive to even modest rate changes, especially homeowners weighing whether to refinance and buyers deciding how much house they can afford with a mortgage.
Mortgage News Daily separately said rates were lower this week, after falling Tuesday as oil prices declined. Matthew Graham, the company’s chief operating officer, said reports of progress in peace efforts through Pakistani mediators helped push oil prices down, which in turn pulled bond yields lower. Since bond yields tend to move with mortgage rates, that shift showed up quickly in daily lending markets.
What Borrowers Can Watch
For borrowers, the key takeaway is that mortgage costs and application volumes can change fast, but the weekly data still point to a market that remains choppy. The MBA figures reflect nationwide activity, not one city or state, and they give a snapshot of how both refinance and purchase demand are reacting to rate moves.
Buyers and homeowners who want the latest reading can check the Mortgage Bankers Association’s weekly survey and Mortgage News Daily’s rate tracker. Those reports do not guarantee where borrowing costs go next, but they do show whether lenders are seeing more or less demand as rates move around from one week to the next.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
