Demand for purchase mortgages has remained at a standstill with a low base. The climb in interest rates is raising alarm among industry professionals. According to the Mortgage Bankers Association (MBA), the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased. Since then it has gone up from 6.82% to 6.84%. This jump further prevents millions of borrowers from accessing money-saving refinancing opportunities.
Though Joel Kan, an economist at the MBA, did express concern over recent rate volatility. He cautioned, the rates are still prohibitive for many borrowers. He pointed out, “After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700.” This is reflective of a larger trend of consumers’ increased borrowing limits.
Refinance applications have been impacted, falling almost three percent from the previous week. Applications to purchase homes increased just three percent during the same period. These purchase applications were up 22 percent from the same week last year. The month over month increase indicates that despite high rates, demand for buying a home continues to build.
The composite index of total mortgage application volume rose by 0.8% on the week last week, as per the Mortgage Bankers Association’s (MBA) seasonally adjusted index. Points for loans with a 20% down payment held steady at 0.62, this includes the origination fee. These numbers paint a challenging picture for the refinance and homebuying market.
Matthew Graham, the chief operating officer of Mortgage News Daily, commented on the market’s reaction to recent statements made by Treasury Secretary Scott Bessent regarding Federal Reserve Chairman Jerome Powell’s potential tenure. He stated, “In not so many words, Bessent told Trump not to fire Powell and this morning’s coverage just expanded on that sentiment.” To us, this embodies the market’s expectation for some leadership continuity during what appears to be growing potentially precarious economic conditions.
We all know the economic environment is very tough. They are really only two basis points lower than they were in the comparable week last year. There is pent-up demand to purchase homes. Millions of potential borrowers are waiting in the wings with a finger on the trigger, as mortgage rates remain elevated.