mortgage Applications Decline Despite Rate Drop to April Lows
WASHINGTON, D.C.- Mortgage application volume fell last week even as interest rates retreated to their lowest levels since April, according to data released Wednesday by the Mortgage Bankers Association (MBA). The overall decline signals continued hesitancy in the housing market despite increasing affordability.
The MBA’s Weekly Mortgage Applications Survey revealed a 3% decrease in total application volume for the week ending September 3,2025. While refinance applications edged up 1% week-over-week adn are 20% higher than the same week last year,purchase applications decreased by 3%-though remain 17% above year-ago levels. This mixed performance underscores a complex landscape for prospective homebuyers and homeowners,where lower rates aren’t necessarily translating into increased activity.
“Mortgage rates declined last week, with the 30-year fixed rate decreasing to its lowest level since April to 6.64 percent,” said Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Though, that was not enough to spark more application activity.”
The refinance share of mortgage activity increased to 46.9% of total applications, up from 45.3% the previous week. Refinance activity was particularly boosted by FHA and VA loans, averaging approximately 30 basis points lower than conventional rates. The adjustable-rate mortgage (ARM) share of activity also rose, reaching 8.8% of total applications.
Kan noted that purchase activity “pulled back, after a four-week run of increases, as slower homebuying activity led to declines in applications across the various loan types.” The data suggests that factors beyond interest rates-such as home prices, inventory levels, and broader economic conditions-continue to weigh on the housing market.
