Mortgage Applications Slip Again As Rates Continue To Climb

Mortgage applications declined for the week ending May 23, 2025, as interest rates climbed to their highest level since January, the Mortgage Bankers Association (MBA) reported.

MBA’s latest Weekly Mortgage Applications Survey showed overall application volume falling 1.2% on a seasonally adjusted basis compared to the previous week. Refinance activity took the brunt of the impact, sliding 7% as rates rose for a third straight week.

Still, refinance applications remained 37% higher than the same time a year ago.

The average rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6.98%, up from 6.92% the prior week, according to MBA. 

“Mortgage rates reached their highest level since January, following higher Treasury yields,” noted Joel Kan, vice president and deputy chief economist at MBA. “As a result of these higher rates, applications activity decreased, driven by a 7% decline in refinance applications.”

Conventional refinances were down 6%, while VA refis dropped a significantly sharper 16%.

Despite the rate environment, purchase applications rose 3% on a seasonally adjusted basis and are tracking 18% above the same time in 2024. Kan attributed the ongoing strength in purchase activity to improving housing inventory in several markets, which is helping sustain transaction volume even as buyers wrestle with economic uncertainty.

Among loan types, the refinance share of total mortgage activity dropped to 34.6% from 36.6% the week prior, while the share of adjustable-rate mortgages (ARMs) increased to 7.5%.

The shares of FHA and USDA loan applications remained flat at 17.9% and 0.5%, respectively. VA loan activity dipped slightly, falling to 12.3% from 12.6%.

MBA’s survey, which has been conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.