Mortgage applications in the United States edged lower last week, even as borrowing costs declined to multi-month lows, data from the Mortgage Bankers Association (MBA) showed Wednesday.
For the week ending August 29, 2025, the MBA’s Market Composite Index, which tracks mortgage loan application volume, dropped 1.2% on a seasonally adjusted basis from the prior week. On an unadjusted basis, applications were down 3%.
Refinancing activity picked up modestly, with the Refinance Index rising 1% week-on-week and up 20% compared with a year earlier. Purchase demand weakened, however, as the seasonally adjusted Purchase Index slipped 3% and the unadjusted measure fell 6% from the prior week, though still stood 17% above last year’s level.
“Mortgage rates declined last week, with the 30-year fixed rate decreasing to its lowest level since April to 6.64%. However, that was not enough to spark more application activity,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
Kan added that refinance applications gained slightly thanks to strength in FHA and VA loans, while conventional refinancing slowed. “The FHA rate is averaging about 30 basis points lower than the conventional rate in 2025, which has made those loans relatively more appealing to eligible borrowers,” he explained.
Purchase activity pulled back after four consecutive weeks of growth, with applications declining across loan types amid softer homebuying demand.
The refinance share of mortgage activity climbed to 46.9% of total applications, up from 45.3% the prior week. Adjustable-rate mortgages (ARMs) also saw more interest, rising to 8.8% of activity.
Government-backed loans gained market share: FHA applications rose to 19.9% from 19.1%, VA loans increased to 13.8% from 13.3%, while USDA applications held steady at 0.5%.
Average mortgage rates fell across all categories:
- 30-year fixed conforming loans ($806,500 or less): 6.64% (from 6.69%)
- 30-year fixed jumbo loans (above $806,500): 6.58% (from 6.67%)
- 30-year FHA-backed loans: 6.31% (from 6.35%)
- 15-year fixed loans: 5.84% (from 6.03%)
- 5/1 ARMs: 5.90% (from 5.94%)
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