Refinance volume jumps, boosting mortgage application activity

Following another decline in mortgage rates, mortgage applications increased 0.6% from one week earlier, per data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Sept. 19, 2025.

Without adjusting for seasonality, the index increased 0.1% compared with the previous week.

A key driver of applications was the refinance share of mortgage activity, which increased to 60.2% of total applications, up from 59.8% last week. The refinance index increased 1% from the previous week and was 42% higher than the same week one year ago.

“Mortgage rates declined further last week, with the 30-year fixed rate falling to its lowest level since last September to 6.34%,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Interest rates generally have moved up following the FOMC meeting last week, but remain in a range that should continue to lead to increased refinance activity. Refinance volume increased further last week and is now 80% higher than four weeks ago, accounting for more than 60% of all application activity.

“The refinance boost last week was from government applications, with VA refinance volume up almost 15%,” he added. “While homebuyer demand typically tends to decrease during the fall, purchase application activity remains relatively strong right now, running 18% ahead of last year’s pace.”

The seasonally adjusted purchase index increased 0.3% from one week earlier. The unadjusted purchase index decreased 1% compared with the previous week and was 18% higher than the same week one year ago.

By product type, 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 from 16.3% to 15.7% during the week, and the U.S. Department of Agriculture (USDA) share of applications decreased from 0.5% to 0.4%.

The U.S. Department of Veterans Affairs (VA) share bucked the trend and increased to 17.5%, up from 15.8% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased 5 basis points to 6.34%, and rates for jumbo loans decreased 4 bps to 6.44%. The average rate for 30-year fixed mortgages backed by the FHA remained unchanged at 6.14%.

The rate for 15-year fixed mortgages increased 7 bps for 5.70%, while 5/1 ARMs decreased by 12 bps to 5.53%.