Mortgage applications take a dive as rates tick back up

Mortgage applications took a 12.7% dive from one week earlier as consumers reacted to slightly elevated mortgage rates. That’s according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending Sept. 26, 2025.

This week’s data paints a different picture compared to last week’s bump up in refinance volume and applications. On an unadjusted basis, the index decreased 13% compared with the previous week.

The refinance index decreased 21% from the previous week, but remained 16% higher than the same week one year ago. The refinance share of mortgage activity decreased to 55.0% of total applications from 60.2% the previous week.

The seasonally adjusted purchase index decreased 1% from one week earlier. The unadjusted purchase index decreased 2% compared with the previous week and was 16% higher than the same week one year ago.

“Mortgage rates increased to its highest level in three weeks as Treasury yields pushed higher on recent, stronger-than-expected economic data. After the burst in refinancing activity over the past month, this reversal in mortgage rates led to a sizeable drop in refinance applications, consistent with our view that refinance opportunities this year will be short-lived,” said Joel Kan, MBA’s vice president and deputy chief economist.

“With the 30-year fixed rate now at 6.46%, refinance activity declined for all loan types, including a 22% decrease in conventional refinances and 27% decrease in VA refinances. The average loan size for refinances dropped to $380,100 from $461,300 two weeks ago as these higher rates eliminated the refinance incentive for many borrowers with large loans.”

Added Kan, “Purchase applications were down slightly over the week after three consecutive increases, but the strength of the purchase market has also been impacted by other factors such as broader economic conditions, the health of the job market, and housing inventory.”

The adjustable-rate mortgage (ARM) share of activity decreased to 8.4% of total applications. The Federal Housing Administration (FHA) share of total applications increased to 16.8% from 15.7% the week prior. The U.S. Department of Veterans Affairs (VA) share of total applications decreased to 16.2% from 17.5% the week prior. 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 increased to 6.46% from 6.34%, and the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances increased to 6.54% from 6.44%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.24% from 6.14%. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.76% from 5.70%, and rates for 5/1 ARMs increased to 5.74% from 5.53%.