Even with 30-year rates at 6.84%, applications for purchases and refinances dipped
Mortgage applications fell last week even as average fixed mortgage rates dropped, with ongoing economic uncertainty prompting many potential homebuyers to hit pause on purchase decisions.
The Mortgage Bankers Association (MBA) said total mortgage application volume decreased by 2.6% on a seasonally adjusted basis compared to the previous week. On an unadjusted basis, application volume was down 4%.
The average contract interest rate for 30-year fixed-rate mortgages on conforming loans ($806,500 or less) fell to 6.84% from 6.93%, marking the lowest rate since April.
“Mortgage rates decreased last week, driven by financial market volatility caused by current geopolitical conflict and ongoing tariff uncertainties. The 30-year fixed rate decreased to 6.84 percent, its lowest level since April,” said Joel Kan, MBA’s deputy chief economist. “Even with lower average mortgage rates, applications declined over the week as ongoing economic uncertainty weighed on potential homebuyers’ purchase decisions.”
Refinance loan applications dropped 2% from the previous week, though refinance activity remains 25% higher than it was a year ago. Seasonally adjusted purchase applications was off by 3% week-over-week, and the unadjusted purchase apps slipped 5% – yet both were still showing double-digit percentage gains from the same time last year.
“Refinance activity declined for both conventional and government borrowers,” Kan noted. “VA applications, however, bucked the trend with a 2% increase in purchase applications and a slight increase in refinance applications. Additionally, the overall average loan size at $380,200, was the lowest since January 2025.”
In a separate report, MBA saw an even steeper slide in new home purchase applications on a monthly basis, down 4.5% in May from a year ago and 9% from April.
“Economic uncertainty, rising mortgage rates, and increasing competition from growing existing-home sales inventory likely dampened overall demand for new home purchases in May,” Kan said. “Applications to purchase newly built homes fell to their slowest pace in three months as buyers held off on their purchase decisions. Estimated new home sales posted a 12% drop, reversing April’s large gain and closer to levels seen earlier in the year.”
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MBA estimates new single-family home sales in May ran at a seasonally adjusted annual rate of 631,000 units, down 12.1% from April’s pace of 718,000. On an unadjusted basis, there were an estimated 58,000 sales, down nearly 11% from the previous month.
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