Higher Rates Cause Mortgage Applications to Fall Sharply

WASHINGTON—Mortgage applications decreased 10.0% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ended July 11, 2025. Last week’s results included an adjustment for the Fourth of July holiday, the MBA noted.

MBA officials said that consumers are sensitive to higher rates and the uncertain economic outlook, which caused mortgage application volume to fall to the lowest level since May.

The Market Composite Index, a measure of mortgage loan application volume, decreased 10.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 13% compared with the previous week. The Refinance Index decreased 7% from the previous week and was 25% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 12% from one week earlier. The unadjusted Purchase Index increased 11% compared with the previous week and was 13% higher than the same week one year ago.

“Treasury yields finished higher last week on average despite an intra-week drop, driven partly by renewed concerns of the impact of tariffs on the economy. As a result, mortgage rates rose after two weeks of declines, which contributed to slower application activity,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Jumbo rates were lower than conventional rates for the third straight week, as some depositories may be positioning themselves for growth in balance sheet lending.”

Kan added, “Purchase applications remained sensitive to both the uncertain economic outlook and the volatility in rates and declined to the slowest pace since May. Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA refinances partially reversing their previous week’s gain, dropping 22%.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.82% from 6.77%, with points remaining unchanged at 0.62 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) increased to 6.75% from 6.69%, with points increasing to 0.66 from 0.65 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.52% from 6.51%, with points increasing to 0.86 from 0.80 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.16% from 6.04%, with points remaining unchanged at 0.63 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 5/1 ARMs increased to 6.08% from 6.01%, with points decreasing to 0.45 from 0.73 (including the origination fee) for 80% LTV loans.

The refinance share of mortgage activity increased to 41.1% of total applications from 40.0% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1% of total applications.

The FHA share of total applications increased to 19.0% from 17.9% the week prior. The VA share of total applications decreased to 12.6% from 13.0% the week prior. The USDA share of total applications decreased to 0.5% from 0.6% the week prior.