Mortgage demand flatlines at low levels, as mortgage rates hit 4-week high

Mortgage rates rose last week to the highest level in four weeks, but mortgage demand didn’t really move. Total mortgage application volume increased 0.8% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.84% from 6.82%, with points remaining unchanged at 0.62, including the origination fee, for loans with a 20% down payment.

Applications to refinance a home loan, which are most sensitive to weekly rate moves, fell 3% for the week and were 22% higher than the same week one year ago, when interest rates were just 2 basis points lower. While the annual jump may seem large, that’s only because the volume is so very small.

Applications for a mortgage to purchase a home rose 3% for the week and were also 22% higher than the same week one year ago.

“After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700,” said Joel Kan, an MBA economist. “With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week.”

Mortgage rates moved slightly lower to start this week, according to a separate survey from Mortgage News Daily. Markets reacted positively Tuesday morning to details from Treasury Secretary Scott Bessent’s thoughts on whether or not Federal Reserve Chairman Jerome Powell would leave office early. Last week, bond yields rose on concerns he might.

“In not so many words, Bessent told Trump not to fire Powell and this morning’s [Tuesday’s] coverage just expanded on that sentiment,” wrote Matthew Graham, chief operating officer of Mortgage News Daily. “The Bessent news helped the bond market begin the day in stronger territory.”