Mortgage applications drop 8.5% as refis slide 18%

Mortgage applications decreased 8.5% on a seasonally adjusted basis for the week ending May 22, and fell 9% on an unadjusted basis. The refinance index declined 18% from the prior week and remained 19% higher than a year earlier. The seasonally adjusted purchase index decreased 0.4%, while the unadjusted purchase index dropped 2% but was 5% higher than the same week last year. The 30-year fixed rate rose 30 basis points over five weeks to 6.65%, reducing refinance demand. Conventional refinances fell 14%, FHA refinances fell 18%, and VA refinances fell 34%. Purchase applications were slightly lower across loan types, while average purchase loan size reached $473,600. Refinance share fell to 38% of applications, the lowest since June 2025, and refinance share declined to 37.5% from 41.9% the prior week.

"Mortgage applications decreased 8.5% from one week earlier, according to data from the Mortgage Bankers Association (MBA)'s weekly mortgage applications survey for the week ending May 22. On an unadjusted basis, the index decreased 9% compared with the previous week. The refinance index slipped again, decreasing 18% from the previous week. It was 19% higher than the same week one year ago."

"The 30-year fixed rate has increased 30 basis points over the past five weeks to its highest level since August 2025. With the rate now at 6.65%, many borrowers understandably backed away from refinancing last week. There were large declines in applications across loan types conventional refinances were down 14%, along with an 18% decrease for FHA applications and a 34% decrease for VA applications."

"Overall, refinance applications accounted for 38% of applications, the lowest share since June 2025. 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."

"The refinance share of mortgage activity decreased to 37.5% of total applications, down from 41.9% the previous week. The adjustable-rate mortgage share of activity decreased to 9.4% of total applications. By product channel, the Federal Housing Administration (FHA) share of total applications decreased to 17.2%, compared to 17.9% the week prior. The U.S. Department of Veterans Affairs (VA) share decreased from 14.4% to 13.2% during the week."

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