Purchase demand fell 19% year over year even as 30-year rates dipped to 7.30%
Three consecutive weeks of falling mortgage rates have done little to coax buyers back into the US housing market.
Mortgage application volume declined 1.2% for the week ending October 30, according to data from the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey.
The slight decline masks a more significant challenge for purchase-focused brokers across the country.
Selma Hepp, Chief Economist at Cotality, says growing inventory, increased price reductions, and greater seller flexibility could create opportunities for buyers willing to enter the market during the slower winter months. https://t.co/IxCy2Z0RBm
— Mortgage Professional America Magazine (@MPAMagazineUS) November 3, 2026
Purchase demand stalls despite rate relief
The seasonally adjusted Purchase Index dropped 2% week over week and sat 19% below the same week in 2025, a year-over-year gap that illustrates how thoroughly elevated borrowing costs have winnowed the homebuyer pool.
On an unadjusted basis, purchase applications slid 4% from the prior week.
The 30-year fixed rate on conforming loan balances ($832,750 or less) eased to 7.30% from 7.37%, its lowest reading since September and a consequence of the Federal Reserve’s decision to pause its rate-hiking campaign at its October meeting.
Jumbo rates – for balances above $832,750 – declined to 7.20% from 7.28%, while Federal Housing Administration (FHA)-backed 30-year mortgages fell to 7.02% from 7.12%.
The 15-year fixed bucked the trend, inching to 6.76% from 6.70%.
“While the 30-year rate declined to 7.3%, activity is still quite slow, with purchase application volume down for the week and refinance volume effectively flat at a very low level,” said Mike Fratantoni, senior vice president and chief economist at the MBA in Washington, D.C.
Read more: Mortgage applications rise as 30-year rate hits three-week low
ARM share climbs to highest level in over a year
With fixed-rate products holding above 7%, brokers are reporting a clear affordability response from clients gravitating toward adjustable-rate mortgages (ARMs).
The ARM share of total applications rose to 11.4%, its highest reading since September 2025, while the 5/1 ARM rate fell to 6.29% from 6.41%.
As rates near their highest level of 2026, brokers are fielding more inquiries from borrowers seeking a lower entry-point rate without leaving the market altogether.
Read more: ARM demand hits near four-year high
“As we have highlighted in recent weeks, more borrowers are choosing ARMs in this environment to lower their initial payments, with the ARM share at its highest level since September 2025,” Fratantoni added.
The refinance share edged to 39.8% from 38.9%, though the Refinance Index rose just 0.1% week over week and remained 60% below year-ago levels.
The rate gap between current products and the sub-4% loans locked in during the pandemic continues to strip away refinancing incentive for most existing homeowners.
The Department of Veterans Affairs (VA) share ticked up to 11.2% from 11.0%, while FHA applications dipped to 16.0% from 16.6%.
For purchase-focused brokers, the data signals a market still searching for a durable catalyst, and finding none in a 7%-plus rate environment.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
