Homebuyers make a last gasp effort before the holidays, but interest rates offer little incentive
A “For Sale” sign in front of a house in Crockett, California, USA on Wednesday, November 12, 2025.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates have been in the same range for nearly two months, providing little incentive for existing borrowers or potential homebuyers to enter the market. Total mortgage application volume remained essentially flat last week, up just 0.2% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with a loan balance of $806,500 or less increased from 6.37% to 6.40%; Points including the origination fee for loans with 20% down payment decreased from 0.62 to 0.60. This was the highest level since early October. In the same week last year, the average rate was 46 basis points higher.
Despite the slight rate increase, mortgage applications to buy a home rose 8% this week and were 20% higher than the same week last year. This was driven by buyers looking for cheaper loans. The government purchasing index, which includes FHA, VA and USDA applications, increased 9% week over week, experiencing its strongest week since 2023.
“Affordability remains an issue in many markets, and government loan programs remain attractive to qualified buyers looking to purchase a home. The average purchase loan size fell to a two-month low,” said Joel Kan, MBA Executive Vice President and Deputy Chief Economist.
Applications to refinance a mortgage fell 6% this week but were 117% higher than the same week a year ago. This huge annual difference is not due to any refinancing boom; Just a year ago the numbers were very low.
Mortgage rates fell slightly starting this week, according to a separate survey from Mortgage News Daily (MND).
“Rather than accounting for any recent fundamental events, the recovery in interest rates/bonds has more to do with the unique trading conditions often seen during major holiday weeks,” MND chief operating officer Matthew Graham said. “However, some [Tuesday’s] contributed data and events. “These include another weak reading in ADP’s weekly employment numbers, as well as reactions to rumors that rate-friendly Kevin Hassett will be the next Fed Chairman.”
