Mortgage Applications Slip Again as Rates Ease, MBA Says

What moved this week

Mortgage demand slipped again even as borrowing costs edged lower. The MBA said overall application volume declined 1.2% from the prior week, covering both purchase and refinance activity. "Mortgage rates drifted down to their lowest level since September 2026 last week in the wake of the Federal Reserve's decision to hold on additional rate hikes at its October meeting," said Mike Fratantoni, the MBA's senior vice president and chief economist.

That slide put the average contract rate on 30-year fixed mortgages with conforming balances of $832,750 or less at 7.3%, down from 7.37% a week earlier. For buyers putting 20% down, points including the origination fee ticked down to 0.75 from 0.76.

Refinance and purchase trends

Refinance demand was basically unchanged, up 0.1% on the week, and still running 60% below the same week a year ago. Even after three straight weekly declines, today's mortgage rates are roughly one percentage point higher than a year earlier, leaving little payoff for most potential refinancers.

Purchase applications declined by 2% from the prior week, leaving them 19% below their level a year earlier. The housing market has yet to thaw after September's sharp rate jump pushed activity into a deep freeze.

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Adjustable-rate moves and early-week read

Borrowers continued shifting toward adjustable-rate mortgages, which start with lower payments but can reset higher. For 5/1 ARMs, the average rate moved down to 6.29% from 6.41%. "As we have highlighted in recent weeks, more borrowers are choosing ARMs in this environment to lower their initial payments, with the ARM share at its highest level since September 2025," Fratantoni said.

A separate Mortgage News Daily survey showed rates ticked higher at the beginning of this week after a hotter-than-expected read on job openings. "All else equal, stronger labor market data tends to put upward pressure on rates. Tech stocks were also modestly higher [Tuesday], and weakness in the tech sector has been a key factor driving persistently lower rates over the past several weeks," according to Matthew Graham, who serves as the chief operating officer for Mortgage News Daily.

Why it matters for your portfolio

Lower rates did not revive demand, but the mix is shifting toward ARMs as buyers try to manage upfront payments. If labor data keeps running hot, that could limit how far rates fall from here, which matters for housing-linked plays and rate sensitive sectors.

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