After weeks of momentum, mortgage market lost steam
Mortgage applications decreased 1.2% last week despite interest rates falling to their lowest level since April, according to new data released by the Mortgage Bankers Association (MBA).
The Market Composite Index, which measures mortgage loan application volume, dropped 1.2% on a seasonally adjusted basis for the week ending Aug. 29, 2025. On an unadjusted basis, the index fell 3% compared with the previous week.
The 30-year fixed mortgage rate declined to 6.64% from 6.69% the previous week, marking the lowest level since April. However, the rate decrease failed to generate increased borrowing activity.
“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,” said Joel Kan, MBA’s vice president and deputy chief economist.
Refinance applications showed mixed results. The Refinance Index increased 1% from the previous week and stood 20% higher than the same week one year ago. However, conventional refinances declined while FHA and VA refinance applications drove the overall increase.
“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,” Kan said.
Purchase applications retreated after four consecutive weeks of increases. The seasonally adjusted Purchase Index decreased 3% from one week earlier, while the unadjusted Purchase Index fell 6% compared with the previous week. Despite the weekly decline, purchase applications remained 17% higher than the same week one year ago.
“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,” Kan said.
The refinance share of total mortgage activity rose to 46.9% from 45.3% the previous week. Adjustable-rate mortgages increased their share to 8.8% of total applications.
Government-backed loans gained market share. FHA applications increased to 19.9% of total applications from 19.1% the week prior. VA loans rose to 13.8% from 13.3%. USDA loans remained unchanged at 0.5%.
Other mortgage rates also declined. Jumbo 30-year fixed rates fell to 6.58% from 6.67%. FHA-backed 30-year fixed rates decreased to 6.31% from 6.35%. Fifteen-year fixed rates dropped to 5.84% from 6.03%. Five-year adjustable-rate mortgages declined to 5.90% from 5.94%.
The MBA survey covers closed-end residential mortgage applications through retail and consumer direct channels and has been conducted weekly since 1990.
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