WASHINGTON-While mortgage rates held study, applications for a mortgage to purchase a home dropped 4% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. 

Volume was just 3% higher than the same week one year ago, even though interest rates last year were considerably higher, the MBA said.

According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.89% from 6.90%, with points increasing to 0.67 from 0.66, including the origination fee, for loans with a 20% down payment. 

‘Slowest Pace Since February’

That rate is 40 basis points lower than the same week in 2024, the MBA data show.

“Mortgage application activity, particularly for home purchases, continues to be subdued by broader economic uncertainty and signs of labor market weakness, dropping to the slowest pace since February,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “With slowly-increasing housing inventory in many markets and first-time homebuyers still in the mix, FHA purchase applications fared better with only a slight decline.”

Decline in Refi’s

The MBA data show applications to refinance a home loan also dropped 4% for the week, and were 42% higher than the same week in 2024.

“Refinance activity dipped again, as mortgage rates remained close to 7%, and borrowers hold out for a bigger decline in rates. Given the pullback in refinancing, the average loan size for refinances declined to just under $290,000, the lowest level in three months,” Kan added in a statement.