Mortgage applications drop as rate relief fails to revive demand
Rates on jumbo loans eased to 7.33%, FHA-backed mortgages fell to 7.13%, and the 15-year fixed came in at 6.73%. Despite the across-the-board relief, demand continued to contract.
“Mortgage rates decreased for the first time in over two months, with the 30-year fixed rate dropping to 7.41%,” said Joel Kan, CMB, MBA’s vice president and deputy chief economist in Washington, DC.
“However, lower rates were not enough to boost application activity, as both purchase and refinance applications continued to decline. Purchase applications fell 18% behind last year’s pace, as higher rates are pricing buyers out of the market.”
Purchase demand takes the harder hit
The seasonally adjusted Purchase Index dropped 7% week-over-week, landing 18% below the same week in October 2025.
National Association of Realtors (NAR) Chief Economist Lawrence Yun, in Washington, DC, stated in response to September’s slide in pending home sales: “Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home.”
