Article Summary
Mortgage applications fell 4.7% last week, with refinance activity dropping 8% despite stable mortgage rates. The ARM share increased, indicating a shift in borrower preferences. AI Summary
Mortgage applications decreased 4.7% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending October 3, 2025.
On an unadjusted basis, the index decreased 5% compared with the previous week.
The refinance index decreased 8% from the previous week and was 18% higher than the same week one year ago. The refinance share of mortgage activity decreased to 53.3% of total applications from 55.0% the previous week.
The seasonally adjusted purchase index decreased by 1% from the previous week. The unadjusted purchase index decreased 1% compared with the previous week and was 14% higher than the same week one year ago.
“With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications,” said Mike Fratantoni, MBA’s SVP and chief economist. “Refinance volume remains somewhat elevated relative to levels of a month ago. Purchase activity declined by about 1% for the week but continues to show moderate growth on an annual basis, and stronger growth for FHA loans, favored by first-time homebuyers.”
Added Fratantoni, “The ARM share increased to 9.5% last week from 8.4% the prior week. Our survey shows 5/1 ARM rates are averaging almost a percentage point below 30-year fixed rates, and this differential is leading more purchase and refinance applicants to consider ARMs.”
The Federal Housing Administration (FHA) share of total applications increased to 18.5% from 16.8% the week prior, and the U.S. Department of Veterans Affairs (VA) share of total applications increased to 16.3% from 16.2% the week prior. The U.S. Department of Agriculture (USDA) share of total applications remained unchanged at 0.4%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.43% from 6.46%. Interest rates for jumbo loans increased to 6.60% from 6.54%.
Interest rates for 30-year fixed-rate mortgages backed by the FHA decreased to 6.19% from 6.24%, while rates for 15-year fixed-rate mortgages increased to 5.77% from 5.76%. The average contract interest rate for 5/1 ARMs decreased to 5.49% from 5.74%.
