Home in Daly City, California, USA, Tuesday, May 19, 2026.
Jason Henry Bloomberg Getty Images
Mortgage demand took another leg lower, although there was a break from rising interest rates.
Total mortgage application volume fell 5.3% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for a 30-year fixed-rate mortgage with a qualifying loan balance, $832,750 or less, fell last week to 7.41% from 7.50%, with points down to 0.75 from 0.83 including origination fees for loans with a 20% down payment.
“Mortgage rates fell for the first time in two months,” Joel Kan, an MBA economist, said in a release. “However, lower rates are not enough to boost application activity, as purchase and refinance applications continue to decline.”
Applications for home loan repayments, which are the most sensitive to weekly movements, fell just 2% for the week, a smaller drop than in previous weeks when rates were rising. Refinance requests are still 59% lower than the same week a year ago. With rates now more than a percentage point higher than a year ago, there is a small pool of borrowers who could benefit from a refinance.
Applications for mortgages to buy houses declined 7% higher for the week and 18% lower than the previous year. Buyers reacted less to weekly moves in rates but more to higher rates overall. A report from the National Association of Realtors on Tuesday showed a sharp decline in September pending home sales. It is measured by signed contracts, so it shows the actual impact of rate increases during the month. Rates remained at higher levels in October.
For buyers in the market, the stock continues to opt for adjustable-rate mortgages, or ARMs, which offer lower rates but are considered riskier because they will eventually reset whatever the market rate is at the end of the term.
“The ARM share remains steady at 10.5 percent, as the ARM rate remains almost a percentage point lower than the 30-year fixed rate, giving borrowers a lower rate option to purchase a home,” added Kan.
Mortgage rates haven’t settled to start this week, according to a separate survey from Mortgage News Daily. Last week was a volatile week for rates, due to monthly inflation reports. This week the movement seems to follow the price of oil.
“But we would be careful not to pay too much attention to the oil price correlation,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “You can’t trust me for more than a month.”
Correction: The National Association of Realtors on Tuesday reported home sales for September. The previous version incorrectly stated the day.