The latest data released by the Mortgage Bankers Association (MBA) in the United States shows that mortgage applications sharply declined last week, dropping by nearly 13% compared to the previous week, as interest rates rose to their highest levels in two months.
According to the Mortgage Bankers Association (MBA) on Wednesday, April 23, the seasonally adjusted index revealed a 12.7% drop in nationwide mortgage applications for the week ending on April 18, 2025, compared to the previous week.
The average contract interest rate for 30-year fixed-rate mortgages, conforming to the loan limit ($806,500 or below), increased from 6.81% to 6.90% from the previous week. This marks the highest rate in two months but is still 34 basis points lower than the same week a year ago, with rates rising nearly 30 basis points in just two weeks.
Industry analysts point out that the rise in interest rates, coupled with concerns among potential homebuyers about the overall economic outlook, has led to a significant decrease in mortgage demand.
Joel Kan, Deputy Chief Economist at the Mortgage Bankers Association, noted that the impact of soaring rates is particularly evident in refinancing activity. He stated, “The higher rates led to a 20% decline in refinancing applications, especially for loans with higher balance requirements, resulting in a significant decrease in average loan sizes.”
Similar to the previous week, economic uncertainty and fluctuating interest rates continue to affect potential homebuyers, as indicated by Kan.
Homebuyers are not only facing the challenge of rising interest rates. With housing prices continuing to climb and recent stock market declines, some are reluctant to sell stocks to make a down payment.
The increase in interest rates has severely impacted the demand for refinancing. Refinancing applications this week dropped by 20% but remain 43% higher than the same period last year. Data from Fannie Mae shows a 23.4% decrease in refinancing application amounts compared to the previous week but a 38% increase from the same period last year.
The share of refinancing in the total mortgage activity decreased from 41.3% the previous week to 37.3%, reaching the lowest level since January.