Mortgage Applications Drop 6.4% as 30-Year Rate Hits 6.76%

Mortgage applications experienced a significant decline of 6.4% for the week ending July 24, as reported by the Mortgage Bankers Association (MBA) in its weekly mortgage applications survey. This decrease was observed on a seasonally adjusted basis, with the overall index falling by 6% compared to the previous week's unadjusted data. The refinance segment of the market saw a substantial drop of 10% from the prior week, and was also 2% lower than the same week in the preceding year. Concurrently, the seasonally adjusted purchase index decreased by 4% week-over-week. The unadjusted purchase index also saw a 3% reduction compared to the previous week, though it remained 3% higher than the corresponding week in the prior year.

Joel Kan, MBA’s vice president and deputy chief economist, attributed the downturn to rising mortgage rates. He stated that following a spike in oil prices the previous week, mortgage rates moved higher, pushing the 30-year fixed rate to 6.76%, a level not seen since August 2025. This upward trend in rates has had a pronounced effect on refinance borrowers, leading to the 10% decline in refinance applications, with government refinances experiencing an even steeper reduction. Kan further noted that despite an increase in housing inventory in certain markets, elevated rates are exacerbating existing affordability challenges for many prospective homebuyers, which in turn contributed to the decrease in purchase activity during the surveyed week.

The refinance share of total mortgage activity declined to 39.5% of all applications, down from 41.2% in the preceding week. In contrast, the share of adjustable-rate mortgages (ARMs) increased to 8.1% of applications. Government-backed loan programs also saw shifts in their application shares. The Federal Housing Administration (FHA) share decreased to 16.9% from 17% the week before. Similarly, the U.S. Department of Veterans Affairs (VA) share fell to 12.6% from 13.2%. The U.S. Department of Agriculture (USDA) share also saw a slight decrease, dropping to 0.4% from 0.5%.

Examining specific interest rates, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.76%, an increase from 6.69% recorded the previous week. For jumbo loan balances, the average rate for 30-year fixed mortgages also climbed to 6.70%, up from 6.44% a week earlier. The data indicates a broad-based increase in borrowing costs across different mortgage types and loan sizes, impacting both refinance and purchase markets.