Lower rates prompt refis and dismissal of ARMs

Mortgage applications increased 7.1% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending October 24, 2025.

On an unadjusted basis, the index increased 7% compared with the previous week.

The refinance index increased 9% from the previous week and was 111% higher than the same week one year ago. The refinance share of mortgage activity increased to 57.1% of total applications from 55.9% the previous week.

The seasonally adjusted purchase index increased 5% a week earlier. The unadjusted purchase index increased 4% compared with the previous week and was 20% higher than the same week one year ago.

“Mortgage rates decreased for the fourth consecutive week, with the 30-year fixed rate down to 6.30%, its lowest level since September 2024. This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications,” said Joel Kan, MBA’s vice president and deputy chief economist. “The ARM share of applications, which had been trending higher, dipped below 10% last week, as lower rates prompted more borrowers to choose fixed-rate loans.”

Kan continued, “Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements. Purchase applications increased compared to a holiday-shortened week across most loan types. However, USDA applications fell more than 26%, impacted by the ongoing government shutdown.”

All product types saw decreases across the board: the adjustable-rate mortgage (ARM) share of activity decreased to 8.9% of total applications, the Federal Housing Administration (FHA) share of total applications decreased to 20.5% from 21.8% the week prior, the U.S. Department of Veterans Affairs (VA) share of total applications decreased to 13.4% from 13.5%, and the U.S. Department of Agriculture (USDA) share of total applications decreased to 0.2% from 0.3% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.30% from 6.37% and rates for 30-year fixed-rate mortgages with jumbo loan balances decreased to 6.38% from 6.39%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 6.12%. The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.67% from 5.74%, while rates for 5/1 ARMs increased to 5.66% from 5.55%.