Purchase and refi applications slow as mortgage rates bounce up

Mortgage applications decreased 10% from one week earlier, according to data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending July 11.

Last week’s results included an adjustment for the July 4 holiday. On an unadjusted basis, the index increased 13% compared with the prior week.

The refinance index decreased 7% from the previous week and was 25% higher than the same week one year ago. But the refi share of mortgage application activity increased, rising to 41.1% of total applications during the week.

The seasonally adjusted purchase index decreased 12% from one week earlier. The unadjusted purchase index increased 11% compared with the previous week and was 13% higher than the same week one year ago.

“Treasury yields finished higher last week on average despite an intra-week drop, driven partly by renewed concerns of the impact of tariffs on the economy. As a result, mortgage rates rose after two weeks of declines, which contributed to slower application activity,” said Joel Kan, MBA’s vice president and deputy chief economist.

“Jumbo rates were lower than conventional rates for the third straight week, as some depositories may be positioning themselves for growth in balance sheet lending.”

“Purchase applications remained sensitive to both the uncertain economic outlook and the volatility in rates and declined to the slowest pace since May,” Kan added. “Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA refinances partially reversing their previous week’s gain, dropping 22%.”

By product, the adjustable-rate mortgage (ARM) share of activity decreased to 7.1% of total applications. The Federal Housing Administration (FHA) share of total applications increased to 19%, up from 17.9% the week prior.

The U.S. Department of Veterans Affairs (VA) share decreased 40 basis points to 12.6%, while the U.S. Department of Agriculture (USDA) share was down 10 bps to 0.5%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased 5 bps to 6.82%. The average rate for 30-year fixed mortgages with jumbo loan balances also increased 6 bps to 6.75%.

The average rate for 30-year fixed mortgages backed by the FHA increased 1 bps to 6.52%, while rates for 15-year fixed loans were up 12 bps to 6.16%. Rates for 5/1 ARMs increased 7 bps to 6.08%.