Mortgage activity continued to retreat last week as rising interest rates cooled both refinance and purchase applications, according to the latest data from the Mortgage Bankers Association (MBA).
The Market Composite Index, a key measure of mortgage loan application volume, fell 12.7% on a seasonally adjusted basis for the week ending April 18, 2025. On an unadjusted basis, applications were down 11% week-over-week.
Refinance applications took the steepest hit, plunging 20% from the previous week. Purchase applications declined by 7% on a seasonally adjusted basis, though volume remained 6% higher than the same week in 2024, suggesting year-over-year resilience despite current headwinds.
Rates Hit Highest Point In Two Months
“Overall mortgage application activity declined last week, as rates increased to their highest level in two months. The 30-year fixed rate rose for the second straight week to 6.9 percent, an almost 30-basis-point increase over two weeks,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
Kan noted that the spike in rates weighed heavily on refinances, particularly for larger loan amounts, and that the average loan size declined significantly. The refinance share of applications dropped to 37.3%, the lowest since January, from 41.3% the week prior.
“Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers as we saw a 7 percent decline in purchase applications. Both conventional and government purchase activity fell relative to the week before, but the overall level of purchase applications was still 6 percent higher than a year ago,” Kan added.
Segment Shifts: FHA, VA, And Jumbo Trends
The breakdown of loan types showed modest shifts:
- FHA applications rose slightly to 16.7%, up from 15.8%.
- VA loan share slipped to 13.4%, down from 13.7%.
- USDA loan share edged lower to 0.4%.
- The adjustable-rate mortgage (ARM) share of activity decreased to 7.5%.
Rate Movement Across Loan Types
The MBA survey also captured broad-based increases in mortgage rates:
- 30-year fixed-rate (conforming) rose to 6.90% from 6.81%, with points increasing to 0.66.
- 30-year jumbo loans matched at 6.90%, up from 6.84%.
- FHA-backed 30-year loans ticked up to 6.56% from 6.52%.
- 15-year fixed rates increased to 6.20%, up from 6.11%.
- 5/1 ARMs, however, declined to 6.01%, down from 6.11%.
With volatility persisting in the interest rate environment, mortgage professionals may need to recalibrate client expectations, particularly for refinancing prospects. For now, purchase activity shows some staying power — but elevated borrowing costs are likely to remain a key challenge heading into the summer months.
