Mortgage Demand Stalls as Rates Hold Steady Near 6.7%
Washington, D.C. – August 27, 2025 – The housing market continues too experience a standstill, with mortgage demand showing minimal movement for the second consecutive week as interest rates remain largely unchanged. According to the Mortgage Bankers Association (MBA), total mortgage application volume decreased by 0.5% last week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) edged up to 6.69% from 6.68%, with points holding steady at 0.60 for loans with an 80% loan-to-value ratio (LTV).
While refinance applications declined 4% week-over-week, they remain 19% higher than the same period last year. Refinancing now accounts for 45.3% of total mortgage activity,down from 46.1% the previous week.
A slight shining spot emerged in the purchase market, with applications increasing 2% for the week – marking the strongest week for purchase demand in a month, albeit from a low baseline. The average purchase loan size also rose to $433,400, the highest in two months, reflecting ongoing increases in home prices.
“Prospective buyers appear to be less sensitive to rates at these levels and are more active,bolstered by more inventory and cooling home-price growth in many parts of the country,” explained Joel Kan,an MBA economist,in a statement.
The market’s stability comes despite recent political news, including President Donald Trump’s firing of Federal Reserve Governor Lisa Cook. The move raises the possibility of a future Fed appointment more inclined towards aggressive interest rate cuts, but has yet to impact current mortgage rates.
The current situation highlights a persistent challenge for the housing market: a lack of meaningful movement in either rates or demand, leaving both buyers and sellers in a state of uncertainty.
