Mortgage applications fall 5% despite rate decline

Mortgage applications decreased 5.0% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending Dec. 19, 2025.

On an unadjusted basis, the index decreased 6% compared with the previous week.

The refinance index decreased 6% from the previous week and was 110% higher than the same week one year ago. The refinance share of mortgage activity increased to 59.1% of total applications from 59.0% the previous week.

The seasonally adjusted purchase index decreased 4% from one week earlier. The unadjusted purchase index decreased 6% compared with the previous week and was 16%5 higher than the same week one year ago.

“Overall mortgage application volume fell last week, despite the slight decline in mortgage rates,” said Mike Fratantoni, MBA’s SVP and chief economist. “MBA expects the trends of a softening job market, sticky inflation, elevated home inventories and steady mortgage rates will persist into the new year.”

Added Fratantoni, “Purchase application volume last week was 16% higher than a year earlier. We are forecasting continued, modest growth in terms of home sales in 2026.”

By product, the adjustable-rate mortgage (ARM) share of activity increased to 8.1% of total applications. The Federal Housing Administration (FHA) share of total applications increased to 20.8% from 19.5% the week prior. The U.S. Department of Veterans Affairs (VA) share of total applications decreased to 15.3% from 16.6% the week prior, while the U.S. Department of Agriculture (USDA) share of total applications remained unchanged at 0.4% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.31% from 6.38%, while rates for 30-year fixed-rate mortgages with jumbo loan balances increased to 6.52% from 6.44%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.14% from 6.12% and rates for 15-year fixed-rate mortgages decreased to 5.70% from 5.72%. The average contract interest rate for 5/1 ARMs increased to 5.79% from 5.63%.

The MBA noted in its report that its offices will be closed beginning on Thursday, Dec. 25, 2025, and will reopen on Friday, Jan. 2, 2026. Due to the closures, the results for weeks ending Dec. 26, 2025, and Jan. 2, 2026 will both be released on Wednesday, Jan. 7, 2026.