Mortgage applications have decreased for the third consecutive week, dropping 3.9% from a week earlier, according to the Mortgage Bankers Association.
“Most mortgage rates moved lower last week, with the 30-year fixed rate declining to 6.92 percent and staying in the 6.8 percent to 7 percent range since April,” said Joel Kan, MBA’s vice president and deputy chief economist.
The Refinance Index decreased 4% from the previous week and was 42% higher than the same week one year ago.
“Mortgage applications decreased over the week but continue to exhibit annual gains, with purchase applications running 18 percent ahead of last year’s place. Government purchase applications were little changed over the week driven by a slight increase in FHA purchase applications. Refinance activity fell across both conventional and government segment and the overall average refinance loan size was the smallest since July 2024, as potential borrowers hold out for larger rate drops,” said Kan.
The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($806,500 or less) decreased to 6.92% from 6.98%, with points decreasing to 0.66 from 0.67 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed mortgages with jumbo loan balances (greater than $806,500) decreased to 6.92% from 6.93%, with points decreasing to 0.60 from 0.69 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed mortgages backed by the FHA increased to 6.68% from 6.66%, with points decreasing to 0.93 from 0.95 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed mortgages increased to 6.25% from 6.23%, with points remaining unchanged at 0.67 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs decreased to 6.14% from 6.22%, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
Mortgage rates are calculated by various factors in the economy, and the length of your loan will also figure into the mortgage rate you qualify for.
The 30-year mortgage rate is tied to the yield of the 10-year Treasury note, according to Fannie Mae. As the yield on the 10-year Treasury note moves, mortgage rates follow.
The yield on the 10-year Treasury note is determined by expectations for shorter-term interest rates in the economy over the duration of a bond, plus a term premium.