Mortgage Applications Decline 12.7% Amid Rising Interest Rates

In the week ending April 18, 2025, mortgage applications in the U.S. experienced a significant downturn, decreasing by 12.7% on a seasonally adjusted basis, according to the Mortgage Bankers Association (MBA). This decline coincides with a rise in mortgage rates to their highest point in two months.​

Refinancing Activity Sees Notable Drop

Refinance applications were particularly affected, plummeting by 20% compared to the previous week. This sharp decrease is attributed to the 30-year fixed mortgage rate climbing to 6.9%, marking an increase of nearly 30 basis points over two weeks. The average loan size also saw a significant reduction, indicating a shift in borrower behavior amid the rising rates

Purchase Applications Also Affected

Purchase applications fell by 7% on a seasonally adjusted basis. Despite this weekly decline, the volume of purchase applications remains 6% higher than the same period in 2024, suggesting some resilience in the market. Both conventional and government-backed purchase activities experienced reductions

Loan Type Distribution Shifts

The composition of loan applications saw slight changes

• FHA loan applications increased to 16.7% from 15.8%.
• VA loan share decreased to 13.4% from 13.7%.
• USDA loan share edged down to 0.4%.
• Adjustable-rate mortgage (ARM) applications declined to 7.5%.

Interest Rates Across Loan Types

The MBA survey reported increases in interest rates across various loan categories:​

• 30-year fixed-rate (conforming) rose to 6.90% from 6.81%.​
• 30-year jumbo loans increased to 6.90% from 6.84%.​
• FHA-backed 30-year loans went up to 6.56% from 6.52%.​
• 15-year fixed rates climbed to 6.20% from 6.11%.​
• 5/1 ARMs decreased to 6.01% from 6.11%.

Outlook

The recent uptick in mortgage rates and the corresponding decline in application activity highlight the sensitivity of borrowers to interest rate changes. As economic uncertainty persists, mortgage professionals may need to adjust client expectations, especially concerning refinancing opportunities. While purchase activity shows some resilience, elevated borrowing costs are expected to remain a significant challenge in the upcoming months