Purchase mortgage applications spike to highest level since early 2023

Lower rates and more listings help drive renewed mortgage demand

Purchase mortgage applications spike to highest level since early 2023

Mortgage demand is picking up momentum as homebuyers respond to rising inventory, moderating price growth, and a dip in borrowing costs.

Overall mortgage loan application volume rose 9.4% on a seasonally adjusted basis, even after factoring in the Fourth of July holiday, according to new data from the Mortgage Bankers Association (MBA). However, the unadjusted index fell 13% week over week.

“Mortgage rates moved lower last week, with the 30-year fixed rate decreasing to 6.77%, its lowest level in three months,” said Joel Kan, MBA’s deputy chief economist.

Rates declined modestly across loan types, helping support application activity. The average contract rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) dropped to 6.77%, down from 6.79% the previous week.

According to Optimal Blue, rate locks edged up 2% in June compared to May, driven mainly by refinance demand. Rate/term refinance locks jumped 17.4%, while cash-out refis rose 8.1%. Purchase locks remained flat.

The average interest rate for conforming mortgage locks in June was 6.67%, down 17 basis points from May. FHA loan lock rates dipped slightly by 6 basis points to 6.47%.

Purchase mortgage applications rose to their highest level of activity since February 2023.

MBA’s seasonally adjusted purchase index climbed 9% from the previous week, while the unadjusted purchase index was 25% higher than the same week in 2024.

Kan added that the surge in activity reflects a market where “homebuyer demand is being fueled by increasing housing inventory and moderating home-price growth.”

The average loan size on a purchase application fell to $432,600, the lowest since January 2025, suggesting more activity in lower price tiers as buyers respond to improved affordability.

Refinance applications also increased 9% from the previous week and is now 56% higher than a year ago, with notable growth in VA refis.

Read next: How will mortgage rates respond to the latest developments in Trump’s trade war?

Despite the growth, the refinance share of total mortgage activity edged down slightly to 40.0%, from 40.1% the previous week. FHA applications also fell modestly from 18.2% to 17.9%, while VA loan activity climbed to 13.0%, up from 12.0%. USDA loan activity held steady, inching up from 0.5% to 0.6%.

Meanwhile, the adjustable-rate mortgage (ARM) share slipped to 7.7% of all applications, suggesting borrowers continue to favor fixed-rate loans amid rate volatility.

Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.