Mortgage applications pulled back last week as rising rates weighed on homebuyer demand, while refinance activity remained largely flat. The Mortgage Bankers Association (MBA) reported a2.3% decreasein total application volume on a seasonally adjusted basis for the week ending May 15.
The decline was driven primarily by softer purchase activity. The seasonally adjusted Purchase Index fell4%from the prior week, though purchase demand remained8%higher than the same week one year ago.
Refinance activity was mostly unchanged despite the rise in rates. The Refinance Index dipped just0.1%week over week but remained35%above year-ago levels.
The average30-year fixed mortgage rateincreased to6.56%from 6.46%, reaching its highest level in seven weeks. According to MBA, concerns surrounding inflation, higher fuel costs, and growing worries over global public debt helped push Treasury yields — andmortgage rates— higher during the week.
MBA’s Joel Kan said, "Overall applications were down to the lowest level in five weeks as purchase borrowers pulled back across conventional and government loan types. Refinance applications were essentially unchanged, with a decline in government refinances and an increase in conventional refinancing, likely as the increase in rates came late in the week."
Kan also noted that adjustable-rate mortgages gained traction as borrowers looked for lower-rate alternatives. ARM loans accounted for nearly 10% of total applications, the highest share since October 2025, with the average ARM rate sitting roughly 80 basis points below the 30-year fixed rate.
Application composition shifted modestly, with refinance share increasing to41.9%from 40.8% the previous week. ARM share rose to9.6%, while FHA share held steady at17.9%. VA share slipped to14.4%from 14.9%, and USDA share edged down to0.4%from 0.5%.
Source: MND NewsWire
