Mortgage rates hit highest level in a month, pushing loan demand down 5%
Houses in San Francisco, California, USA on Wednesday, November 12, 2025.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates rose for the third week in a row, causing demand from both existing homeowners and potential homebuyers to decline. Total mortgage application volume fell 5.2% last week compared to 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 loan balances of $806,500 or less rose to 6.37% from 6.34% last week; Points including the origination fee for loans with 20% down payment remained unchanged at 0.62. This is the highest level in the last four weeks.
Applications to refinance mortgages, which are the most sensitive to short-term movements in interest rates, fell 7% this week but were still 125% higher than the same week a year ago. This time last year, mortgage rates were about half a percentage point higher and refinancing volume was unusually low. The large increase from a year ago is a factor of very small volumes overall.
Mortgage applications to buy a home fell 2% this week and were 26% higher than the same week a year ago. Purchase demand has remained at the same level for several months, regardless of movements in interest rates.
“Although there was a small increase in FHA purchase applications, application activity was lower throughout the week as potential homebuyers stepped aside again,” MBA analyst Joel Kan said in the release.
The overall average loan size for both purchase and refinance applications fell to its lowest level since August of this year, driven by another decline in the share of adjustable-rate mortgages, according to Kan.
Mortgage rates were virtually unchanged as of this week, according to a separate survey from Mortgage News Daily.
“With only a few exceptions, bonds have been like a rudderless ship during the government shutdown. With the backlogged data returning slowly and uncertainly, rudder repairs are similarly slow,” wrote Matthew Graham, MND’s chief operating officer. “The surprise release of stale jobless claims data did nothing to inspire, and another negative print on the weekly ADP numbers was of limited benefit.”
