ARM, refinance activity buck the trend of declining
Wednesday, Oct 22, 2025

ARM, refinance activity buck the trend of declining mortgage demand

Mortgage applications decreased 0.3% from one week earlier, according to data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Oct. 17.

On an unadjusted basis, the index decreased 0.2% compared with the previous week.

The refinance index increased 4% from the previous week and was 81% higher than the same week one year ago. The refinance share of mortgage activity increased to 55.9% of total applications, up from last week’s share of 53.6%.

The seasonally adjusted purchase index decreased 5% from one week earlier. The unadjusted purchase index also decreased 5% compared with the previous week and was 20% higher than the same week one year ago.

“The lowest mortgage rates in a month spurred an increase in refinance activity, including another pickup in ARM applications. The 30-year fixed rate decreased to 6.37% and all other loan types also decreased,” said Joel Kan, MBA’s vice president and deputy chief economist. “The refinance index increased 4%, driven by a 6% increase in conventional refinances and a 12% increase in FHA refinance applications, as borrowers remain attentive to these opportunities to lower their monthly mortgage payment. VA refinances bucked the trend and were down 12%.

“ARM applications increased 16% over the week, which pushed the ARM share to 11%, with the ARM rate more than 80 basis points lower than the 30-year fixed rate. Purchase applications were down over the week but remained 20% higher than a year ago,” Kan added.

By product type, the Federal Housing Administration (FHA) share of total applications continued its upward trajectory, increasing to 21.8% of applications compared to 20.5% the week prior.

Meanwhile, the U.S. Department of Veterans Affairs (VA) share of total applications decreased to 13.5%, down from 14.9% the week prior, and the U.S. Department of Agriculture (USDA) share of total applications dropped from 0.4% to 0.3% during the week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased from 6.42% to 6.37%. Interest rates for 30-year fixed mortgages with jumbo loan balances decreased from 6.47% to 6.39%.

FHA mortgage rates also moved lower, down 7 basis points to 6.12%, while rates for 15-year fixed mortgages were down 3 bps to 5.74%. The average rate for 5/1 ARMs dropped 8 bps to 5.55%.

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By: Sarah Wolak
Title: ARM, refinance activity buck the trend of declining mortgage demand
Sourced From: www.housingwire.com/articles/mortgage-applications-dip-refinance-surge/
Published Date: Wed, 22 Oct 2025 15:31:42 +0000

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