Mortgage Rates Ease, but Mortgage Applications Continue to Decline

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 16, 2026, mortgage applications experienced a decline of 5.3% relative to the preceding week.

The Market Composite Index, which serves as an indicator of mortgage loan application volume, declined by 5.3% on a seasonally adjusted basis compared to the previous week. In unadjusted terms, the Index fell 5% from the week prior. The Refinance Index contracted 2% from the preceding week and demonstrated a 59% reduction compared to the corresponding week in the prior year. The seasonally adjusted Purchase Index declined 7% relative to the previous week. The unadjusted Purchase Index decreased 7% from the week prior and reflected an 18 percent reduction compared to the same week one year earlier.

“Mortgage rates decreased for the first time in over two months, with the 30-year fixed rate dropping to 7.41 percent. However, lower rates were not enough to boost application activity, as both purchase and refinance applications continued to decline,” said Joel Kan, CMB, MBA’s VP and Deputy Chief Economist. “Purchase applications fell 18 percent behind last year’s pace, as higher rates are pricing buyers out of the market. The ARM share held steady at 10.5 percent, as ARM rates remained almost a full percentage point lower than the 30-year fixed rate, giving qualified borrowers a lower rate option to purchase a home.”

The proportion of refinance applications rose to 39% of total submissions, up from 37.7% in the preceding week. The share of adjustable-rate mortgage (ARM) applications remained constant at 10.5% of total submissions.

The Federal Housing Administration (FHA) share of total applications declined to 16.3% from 16.4% the previous week. The Veterans Affairs (VA) share of total applications declined to 11.5% from 11.9% the previous week. The United States Department of Agriculture (USDA) share of total applications declined to 0.5% from 0.6% the previous week.

The mean contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (not exceeding $832,750) declined to 7.41% from 7.5%, with points declining to 0.75 from 0.83 (including the origination fee) for loans with an 80 percent loan-to-value ratio (LTV). The effective rate demonstrated a decline compared to the previous week.

The mean contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (exceeding $832,750) declined to 7.33% from 7.49%, with points declining to 0.60 from 0.70 (including the origination fee) for loans with an 80% LTV. The effective rate demonstrated a decline compared to the previous week.

“It is very clear that the higher mortgage rate environment has cooled the housing market this fall,” Kan said.

The contractual interest rate applicable to fifteen-year fixed-rate mortgage products declined to 6.73 percent from the previous rate of 6.87 percent. Concurrently, points associated with such mortgages decreased to 0.73 from 0.90, inclusive of origination fees, for loans with an 80 percent loan-to-value ratio. The corresponding effective rate demonstrated a decline relative to the preceding week.

The contractual interest rate for five-year adjustable-rate mortgage products similarly declined to 6.46 percent from 6.54 percent. Points for these instruments decreased to 1.11 from 1.13, inclusive of origination fees, for loans maintaining an 80 percent loan-to-value ratio. The corresponding effective rate likewise demonstrated a decline relative to the preceding week.

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