Tuesday, March 25, 2025, Home in Hercules, California, USA.
David Paul Morris | Bloomberg | Getty Images
Last week saw wild swings in mortgage rates, hurting demand. Total mortgage applications fell 1.9% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
This week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $806,500 or less increased from 6.30% to 6.31% for loans with a 20% down payment. Although this was a weekly average, interest rates actually fell to their lowest level in more than a year last Tuesday, before spiking Wednesday afternoon following the Fed’s interest rate announcement and comments from Chairman Jerome Powell. Rates continued to rise on Thursday, before returning slightly on Friday, according to a separate report from Mortgage News Daily.
As a result, the number of mortgage refinance applications, which are most sensitive to day-to-day interest rate changes, fell 3% in the same week, although they were still 151% higher than in the same week last year. Due to high interest rates at this time last year, refinancing had been delayed for several weeks.
“The average loan size for refinance applications was at its highest level in six weeks as borrowers with large debts continued to look for ways to lower their monthly payments,” MBA Economist Joel Kang said in a release.
The number of applications for mortgages to buy homes fell by 1% for the week, and rose by 26% compared to the same week last year.
“Purchase applications were down slightly compared to a week ago, but FHA purchase applications were up slightly as prospective homebuyers continued to explore financing options to address tough affordability conditions,” Kang added.
Mortgage rates rose slightly earlier this week, but Wednesday’s release of economic data on employment could lead to a more definitive move in either direction.
