Mortgage Applications Slow Down As Rates Shackles Refis

Mortgage applications hit their slowest pace since the beginning of 2025, reversing an upward trend.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — slipped by 6.6% last week, negating the week prior’s 2.3% increase.

Adjusted purchase applications slipped by 6%, while the unadjusted index was down 1% and 7% higher year-over-year.

Refinances, which had been enjoying a boom thanks to slowly cooling rates, finally got caught in new rate anxieties, falling by 7% on the week. 

Though rates decreased once again, they remain above 6.90%, too close to the 7% threshold for many homeowners. As a result, the refinance share of mortgage activity decreased from 40.2% to 38.7% of total applications.

“Mortgage rates decreased on average over the week, as markets brushed off unexpectedly strong inflation data,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

“Purchase applications were down for the week, as buyers remained on the fence, although loosening inventory may help support activity in the coming months. Refinance applications had been rising in previous weeks but dipped as rates remained close to 7%.”

Refinance demand benefits from a growing share of homeowners with high rates. Across the country, 17.2% of homeowners have rates greater than or equal to 6%, the highest share since 2016.

However, 82.2% of homeowners still have rates below 6%, down from more than 90% in 2022 but still a barrier to a booming market.

Fannie Mae economists expect rates to stay above 6.5% through 2025.