As a result, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) rose to 6.82% from 6.77%.
Kan also noted that for the third consecutive week, jumbo mortgage rates remained lower than conventional rates, suggesting some depository institutions may be ramping up balance sheet lending.
Refinance applications dropped 7% from the previous week, though it remains 25% above levels seen a year ago. Purchase applications fell more sharply, declining 12% on a seasonally adjusted basis. However, MBA’s unadjusted Purchase index increased 11% week over week and was 13% higher than the same week in 2024.
Refinance activity was particularly impacted by rising rates.
“Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA refinances partially reversing their previous week’s gain, dropping 22%,” Kan said. Purchase applications fell to their slowest pace since May, underscoring the market’s sensitivity to rate volatility and economic uncertainty.