Realtor.com reports, "Home loan applications slightly ticked up 1.1% for the second week, but are trending lower than last week when overall applications increased 11%.
The latest data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey shows a 1.1% increase on mortgage loan application volume on a seasonally adjusted basis from one week earlier. The refinance index decreased 0.4% from the prior week but was 44% higher than the same week one year ago.
"The most notable change in this week's data was the increase in purchase applications, which jumped 2.3% on a weekly basis and were up 18% year over year," says Hannah Jones, senior economic research analyst at Realtor.com®. "The spring housing market is picking up, and buyers are taking advantage of the highest inventory levels in more than 5 years, pushing purchase applications higher."
“Last week saw steadier mortgage rates, as the FOMC meeting played as predicted, and market movements led to a small two-basis point increase in the 30-year conforming rate to 6.86 percent,” says Mike Fratantoni, the MBA’s senior vice president and chief economist.
The refinance share of mortgage activity dipped down to 36.4% of total applications from 37.1% the previous week. Also seeing a decrease—adjustable rate mortgages (ARM) decreased to 7.4% of total applications.
"Refinance applications were also steady for the week, but were significantly higher year-over-year, spurred on by lower mortgage rates compared to one year ago," adds Jones.
The share of Federal Housing Administration loans increased to 17.4% from 16.4% the week prior. The Veterans Administration share of total applications slightly increased to 13.4% from 13.3% the week prior. Meanwhile, the USDA share of total applications remained the same at 0.5% from last week.
"There was a notable gain in government purchase applications, up almost 5 percent for the week and 40 percent on an annual basis," says Fratantoni.
Contract rates
The average interest rate agreed upon for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.86% from 6.84%, with points remaining unchanged at 0.68 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
For 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500), this decreased to 6.85% from 6.86%, with points increasing to 0.49 from 0.46 (including the origination fee) for 80% loan-to-value (LTV) loans. The effective rate increased from last week.
For 15-year fixed-rate mortgages, applications decreased to 6.12% from 6.17%, with points decreasing to 0.59 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
Applications for 5/1 ARMs increased to 6.09% from 5.97%, with points increasing to 0.74 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
A 5/1 ARM is a loan where the interest rate is fixed for the first five years and then adjusts annually after the fifth year.
"Overall mortgage application volume remained roughly flat compared to the previous week, mirroring interest rates, which held steady at 6.76% for the last two weeks," says Jones.
Mortgage rates calculated
Mortgage rates are calculated by various factors in the economy, and the length of your loan will also figure into which mortgage rate you qualify for. The 30-year mortgage rate is benchmarked to the rate of the 10-year Treasury note, according to Fannie Mae. As the rate on the 10-year Treasury note moves, mortgage rates follow.
The rate on the 10-year Treasury note is determined by expectations for shorter-term interest rates in the economy over the duration of a bond, plus a term premium."
Source: Realtor.com
Written by: Joy Dumandan
Published: May 14, 2025
Posted by Grossman & Jones Group on
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