Weekly Mortgage Applications Rebound as Rates Fall Amid Macro Concerns

02:48 PM EDT, 08/06/2025 (MT Newswires) -- Mortgage applications in the US rebounded last week as the 30-year fixed rate on conforming loans dropped for a third consecutive week, the Mortgage Bankers Association said Wednesday.

The market composite index, which measures loan application volume, rose 3.1% on a seasonally adjusted basis for the week ended Friday, following a 3.8% drop the week prior. Without adjustments, the index gained 3% on a weekly basis.

The average interest rate for 30-year fixed mortgages with loan balances of $806,500 or less fell to 6.77% from the previous week's 6.83%. For higher loan balances, the rate dropped to 6.65% from $6.74%. For 15-year loans, the rate moved down to 6.03% from 6.12%, according to the MBA.

"Mortgage rates moved lower last week, following declining Treasury yields as economic data releases signaled a weakening US economy," said Joel Kan, the association's deputy chief economist. "Borrowers sought to take advantage of these lower rates, as both purchase and refinance applications increased over the week."

Last week, official data showed that the US economy added fewer jobs than projected in July, while gains in the previous two months were revised sharply lower, suggesting that labor market conditions are weakening. US manufacturing sector activity contracted at a faster rate sequentially in July, Institute for Supply Management data showed, while a separate report from S&P Global (SPGI) indicated that operating conditions deteriorated for the first time this year.

The purchase index rose 2% on a seasonally adjusted basis from a week ago, according to MBA data released Wednesday. The gauge for refinancing activity advanced 5%. Refinance applications rose to their strongest pace in four weeks, Kan said.

"Purchase activity continued to lead 2024's pace, as increasing for-sale inventory of homes has been supporting home buying, but on the other hand recent weakness in the economic environment has deterred some prospective homebuyers," Kan said.

The share of Federal Housing Administration-backed loans, which are often used by first-time home buyers and can involve smaller down payments, ticked down to 18.5% from 18.8% the week prior, the MBA said.

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