Rate Decline ‘Not Enough To Spark’ More Purchase Activity – NMP Skip to main content

Rate Decline ‘Not Enough To Spark’ More Purchase Activity

Sep 03, 2025
Potential Homebuyer Couple Unsure Of Purchase Decision

Though overall applications fell, refis edged higher on lower FHA and VA rates

Mortgage applications declined 1.2% last week as purchase activity pulled back following a month of steady gains, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 29, 2025.

The Market Composite Index, which tracks total application volume, was down 1.2% on a seasonally adjusted basis (3% unadjusted) from the prior week. That follows a 0.5% dip in the previous survey.

Refinance Index: Up 1% from the prior week; 20% higher than the same week in 2024.

Purchase Index (seasonally adjusted): Down 3% from the prior week.

Purchase Index (unadjusted): Down 6% week over week, but still 17% above last year.

MBA Vice President And Chief Economist Joel Kan
Joel Kan

“Mortgage rates declined last week, with the 30-year fixed rate decreasing to its lowest level since April to 6.64%. However, that was not enough to spark more application activity,” said MBA Vice President and Deputy Chief Economist Joel Kan. 

Kan noted that refinance applications were buoyed by government-backed programs, even as conventional refinances slipped. 

“Refinance applications saw a small increase from the previous week, driven by FHA and VA refinance applications, but conventional refinances declined,” he noted. “The FHA rate is averaging about 30 basis points lower than the conventional rate in 2025, which has made those loans relatively more appealing to eligible borrowers.”

On the purchase side, activity cooled after four consecutive weekly increases. “Purchase activity pulled back ... as slower homebuying activity led to declines in applications across the various loan types,” Kan added.

Loan Type Share of Total Applications:

  • Refinance share: 46.9% (up from 45.3%)
     
  • Adjustable-Rate Mortgage (ARM) share: 8.8% (up from 8.4%)
     
  • FHA share: 19.9% (up from 19.1%)
     
  • VA share: 13.8% (up from 13.3%)
     
  • USDA share: 0.5% (unchanged)

Average Contract Interest Rates:

  • 30-year fixed (conforming ≤ $806,500): 6.64% (down from 6.69%), points at 0.59
     
  • 30-year fixed (jumbo > $806,500): 6.58% (down from 6.67%), points at 0.39
     
  • FHA 30-year fixed: 6.31% (down from 6.35%), points at 0.74
     
  • 15-year fixed: 5.84% (down from 6.03%), points at 0.84
     
  • 5/1 ARM: 5.90% (down from 5.94%), points at 0.34

The MBA survey has been conducted weekly since 1990, covering U.S. closed-end residential mortgage applications through retail and consumer-direct channels.

 

About the author
Published
Sep 03, 2025
Even at 6%, Mortgage Rates May Not Be Enough to Unlock Home Sales

New Realtor.com analysis finds that moving would still increase the typical homeowner's mortgage payment by nearly 62%

Nov 11, 2026
Younger Borrowers Want More Personal Guidance Despite Digital Gains

Nearly half say their lender representative should have been more involved, while fewer borrowers overall receive same-day answers, JD Power finds

Nov 10, 2026
Mortgage Locks Plunge 19% Despite Rate Relief, ARM Share Hits New High

October's sharp decline in lending activity points to a tougher purchase market, even as borrowers turn to ARMs, FHA, and Non-QM financing

Nov 10, 2026
Condo Sellers Outnumber Buyers 2 to 1 as Financing Pressures Mount

Redfin reports the widest condo market imbalance in 13 years, giving buyers more negotiating power

Nov 10, 2026
Cash-Out Borrowers Leave Servicers Behind as Home Equity Hits Q3 Record

ICE reports $17.5 trillion in homeowner equity, while cash-out refinances account for 75% of servicers' refinance-related loan losses

Nov 09, 2026
Mortgage Payments Rise 13% As Home Sales Slide: Zillow

Zillow reports the steepest annual drop in newly pending home listings since 2023, adding pressure to an already weakening purchase market

Nov 09, 2026