As U.S. homebuyers continue to navigate a bittersweet housing market–one where inventory is becoming more balanced in many markets but prices and mortgage rates remain elevated–home purchase application activity pulled back this past week as rates hit their highest point since June 2025.
The latest Market Composite Index from the Mortgage Bankers Association (MBA)—its measure of mortgage loan activity volume and includes purchases and refinances—shows mortgage application activity decreasing 2.7% on a seasonally adjusted basis after last week’s 0.8%% increase. On an unadjusted basis, the Index decreased 4% compared with the previous week.
The pullback comes as the average 30-year mortgage rate increased to 6.71% this past week, a 13-month high, according to MBA. The average 30-year fixed mortgage rate has jumped up to 6.97% as of this writing, likely holding application activity at bay for the week ahead as well.
“Mortgage rates moved higher last week, driven by ongoing investor concerns over inflation and the federal budget deficit,” said Joel Kan, CMB, MBA’s vice president and deputy chief economist.
MBA’s Refinance Index saw a 6% decrease from a 1% decrease the previous week and was 25% lower than the same week one year ago. MBA’s seasonally adjusted Purchase Index–its weekly measurement of nationwide home loan applications based on a sample of about 75% of U.S. mortgage activity–decreased 0.2% from one week earlier. The unadjusted Purchase Index decreased 3% compared with the previous week and was 4% higher than the same week one year ago, according to the report.
The refinance share of mortgage activity decreased to 40.9% from 41.8% the previous week, MBA reported. Notably, the adjustable-rate mortgage (ARM) share of activity increased to 8.5% of total applications, a trend MBA is keeping an eye on, Kan noted.
“Refinance applications remain significantly impacted by these higher rates, falling to the slowest weekly pace since May 2025. Purchase applications overall were little changed from last week, but more borrowers have shifted to using ARM loans, with the ARM share of applications at 8.5 percent, the highest share since June.”
He added: “Higher mortgage rates continue to weigh on prospective homebuyers looking to act, even as housing inventory has increased in many markets.”
For government-backed loans, this week’s report showed the FHA share of total applications increase to 17.2% from 15.9% the week prior. The VA share of total applications decreased to 12.0% from 13.6% the week prior, and the USDA share of total applications remained unchanged at 0.5% from the week prior.
To view the full report, click here.
