As Rates Climb, Mortgage Applications See Large Declines Across Loan Types

As mortgage rates reached their highest point since August of last year this past week, purchase applications were down across all loan types yet still running ahead at a stronger pace than last year at this time.

According to the latest Market Composite Index from the MBA—its measure of mortgage loan activity volume and includes purchases and refinances—application activity decreased 8.5% on a seasonally adjusted basis from last week’s 2.3% decrease, for the week ending May 22. On an unadjusted basis, the Index decreased 9% compared with the previous week.

“The 30-year fixed rate has increased 30 basis points over the past five weeks to its highest level since August 2025,” said Joel Kan, MBA’s vice president and deputy chief economist. “With the rate now at 6.65 percent, many borrowers understandably backed away from refinancing last week.

“There were large declines in applications across loan types–conventional refinances were down 14 percent, along with an 18 percent decrease for FHA applications and a 34 percent decrease for VA applications,” Kan noted, adding, “Purchase applications were slightly lower across all loan types but still ran at a stronger pace than last year’s pace. The average loan size for a purchase application reached another survey high at $473,600, as borrowers with smaller loan sizes were less active given the higher rate environment and its negative impact on their purchasing power.”

MBA’s Refinance Index decreased 18% from the previous week and was 19% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.4% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 5% higher than the same week one year ago, according to the report.

The refinance share of mortgage activity decreased to 37.5% of total applications from 41.9% the previous week–the lowest share since June 2025, MBA said. The adjustable-rate mortgage (ARM) share of activity decreased to 9.4% of total applications.

Government-backed loans were all mostly down this week: The FHA share of total applications decreased to 17.2% from 17.9% the week prior. The VA share of total applications decreased to 13.2% from 14.4% the week prior, but the USDA share of total applications increased slightly to 0.5% from 0.4% the week prior.

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