Mortgage applications fell 1.2% overall last week, even as rates on home loans declined for a third consecutive week, according to the Mortgage Bankers Association’s seasonally adjusted index. Applications to purchase a home dropped 2% from the previous week and were 19% lower than a year earlier.
The average contract rate for a 30-year fixed mortgage with a conforming balance of $832,750 or less decreased to 7.3%, from 7.37%. The average points charged, including the origination fee, edged down to 0.75 from 0.76 for loans with a 20% down payment.
Mike Fratantoni, the MBA’s senior vice president and chief economist, said rates reached their lowest point since September 2026 after the Federal Reserve decided at its October meeting not to raise rates further. Despite the recent decline, mortgage rates remain about one percentage point above their level a year earlier, limiting borrowers’ incentive to refinance.
Refinance applications were nearly unchanged, rising 0.1% for the week, but were 60% below the same period last year. Meanwhile, adjustable-rate mortgages accounted for a growing share of applications. The average rate on a 5/1 ARM fell to 6.29% from 6.41%, and Fratantoni said the ARM share was at its highest level since September 2025 as borrowers sought lower initial payments.
Mortgage rates ticked up at the start of this week, according to a separate survey by Mortgage News Daily, following a stronger-than-expected report on job openings. The company’s chief operating officer, Matthew Graham, said stronger labor-market data can put upward pressure on rates, while weakness in the technology sector had helped push rates lower in recent weeks. The report also noted that high home prices and inflation continue to stretch affordability.
Sources: CNBC Markets.