“Mortgage rates crept higher last week, with the 30-year fixed rate up to 6.4%, its highest level since early October,” said Joel Kan, MBA’s vice president and deputy chief economist. “Despite these slightly higher rates, purchase applications increased over the week and remained at a stronger pace than a year ago, with increases across conventional and government purchase applications. The government purchase index, which includes FHA, VA and USDA applications, increased 9% and had the strongest week since 2023.
“Despite slowing home-price growth and lower mortgage rates, affordability remains a challenge in many markets and government loan programs remain appealing to qualified buyers looking to purchase a home,” Kan added. “The average purchase loan size decreased to its lowest level in two months. Rates have increased by around 10 basis points over the past four weeks and given that many borrowers have been looking to capitalize on rate drops, refinance applications last week declined almost 6% to the slowest weekly pace since September.”
Although the refinance index was down 6% from the previous week, it was 117% higher than the same week one year ago. The refinance share of mortgage activity also decreased, shrinking to 53.4% of total applications, down from 55.4% a week earlier.
The seasonally adjusted purchase index increased 8% from one week prior. The unadjusted purchase index increased 2% compared with the previous week and was 20% higher than the same week in 2024.
The adjustable-rate mortgage (ARM) share of activity increased to 7.9% of total applications.
The Federal Housing Administration (FHA) share of total applications decreased to 18.8% compared to 19.9% the week prior.
Meanwhile, the U.S. Department of Veterans Affairs (VA) share of applications increased from 15.2% to 15.4% and the U.S. Department of Agriculture (USDA) share also increased from 0.3% to 0.4% during the same period.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased from 6.37% to 6.40% during the week. Rates for 30-year fixed mortgages with jumbo loan balances increased from 6.39% to 6.49%.
The average rate for 30-year fixed mortgages backed by the FHA increased from 6.14% to 6.15%, while rates for 15-year fixed loans decreased from 5.83% to 5.80%. Interest rates for 5/1 ARMs decreased from 5.65% to 5.44%.