Mortgage applications stall as rate inertia squeezes buyers
“Mortgage rates and applications changed little last week, with just a slight increase in refinances for conventional and VA loans, while FHA refinances were lower,” said Joel Kan, CMB, MBA’s VP and Deputy Chief Economist.
“Borrowers with larger loan sizes remain less likely to refinance with rates at these higher levels. The average loan size on refinances continues to shrink, dipping to $282,200 last week, the lowest level since June 2025.”
Refinances edge higher, but the composition tells a cautionary story
The Refinance Index gained 2% week over week, lifting the refinance share of total applications to 41.9% from 40.7% the prior week.
Gains were concentrated in conventional and VA refinances, while FHA refinance activity declined.
The shrinking average refi loan size signals that higher-balance borrowers — typically those with the most to gain from refinancing — are largely staying on the sidelines at current rate levels.
