Rate Decline ‘Not Enough To Spark’ More Purchase Activity

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.

“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.