Mortgage applications decreased again for the third consecutive week, according to the Mortgage Bankers Association (MBA).
The volume of mortgage loan applications decreased 1.2% on a seasonally adjusted basis for the week ending August 29, or 3% on an unadjusted basis. The previous survey reported a seasonally adjusted decrease of 0.5%.
While 30-year mortgage rates dropped to a 10-month low, it still may not be enough for buyers to make a move and for mortgage applications to gain traction.
Joel Kan, MBA’s vice president and deputy chief economist, said, “Mortgage rates declined last week, with the 30-year fixed rate decreasing to its lowest level since April to 6.64%. However, that was not enough to spark more application activity.”
Although the total volume of mortgage applications decreased, refinanced mortgages increased 1% from the previous week, 20% higher than a year ago. The total share of refinances also increased to 46.9%, and was previously 45.3% the week before.
Purchase applications decreased more dramatically. The seasonally adjusted index decreased 3% from the week earlier, and the unadjusted index dropped 6% from that same week. Yet the unadjusted index is 17% higher than the same week last year. Purchase applications grew 2.2% in the previous week’s survey, signaling lost gains.
The adjustable-rate mortgages (ARM) index increased 4.4%, while their share also increased to 8.8% of total applications, overcoming the previous week’s decline of 8.4%.
Most government-backed loans increased from last week’s report. FHA applications increased to 19.9% of total applications, and was 19.1% the week prior. VA loans also jumped to 13.8%, a slight climb from last week’s 13.3%. However, USDA loans remain unchanged at 0.5%.
“Refinance applications saw a small increase from the previous week, driven by FHA and VA refinance applications, but conventional refinances declined,” Kan said. “The FHA rate is averaging about 30 basis points lower than the conventional rate in 2025, which has made those loans relatively more appealing to eligible borrowers. Purchase activity pulled back, after a four-week run of increases, as slower homebuying activity led to declines in applications across the various loan types.”
The growing decline in mortgage applications may be a reflection of the consumer outlook on the real estate market. While divided by generation, a notable 42% of Americans believe the economy will worsen in the next 12 months, according to a recent survey by Realtor.com®.
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