Purchase demand fell as borrowers faced renewed affordability pressure with rates stuck at 6.77%
Mortgage application volume held essentially flat in the week ending August 14, as unchanged interest rates gave neither buyers nor refinancers a compelling reason to act, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The Market Composite Index, a measure of overall loan application volume, declined 0.4% on a seasonally adjusted basis and 1% on an unadjusted basis from the prior week.
Purchase applications bore the brunt of the softness, falling 2% week over week on a seasonally adjusted basis and 3% on an unadjusted basis, and coming in 3% below the same period in 2025.
"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.
The 30-year conforming rate held at 6.77% for the week, with points easing to 0.65 from 0.67 on 80% loan-to-value ratio loans.
The jumbo 30-year rate edged up to 6.71% from 6.68%, while FHA borrowers saw their average rate tick higher to 6.45% from 6.43%.
The 15-year fixed dipped to 6.08% from 6.10%, and the 5/1 adjustable-rate mortgage (ARM) rate eased to 5.94% from 5.99%. The ARM share of total applications slipped to 7.7%.
Last week's brief uptick in mortgage application volume as rates eased now appears to have been a short-lived reprieve rather than a turning point.
The 30-year fixed-rate mortgage slipped two basis points to 6.67% for the week ending August 13, according to Freddie Mac's Primary Mortgage Market Survey.https://t.co/v2EpDCj0jj
— Mortgage Professional America Magazine (@MPAMagazineUS) August 13, 2026
Affordability concerns resurface as a drag on homebuyers
The flat headline figure may understate deteriorating sentiment among potential buyers. Kan noted that purchase applications are now running below year-ago levels, pointing to a pair of forces holding the market back.
"In addition to the economic uncertainty, affordability difficulties have reemerged as a reason for homebuyers to delay purchase decisions given the impact of higher mortgage rates on monthly mortgage payments," the report said.
The data adds to a difficult summer for US origination. Buyers have already been pulling back, and with no Federal Reserve rate cuts expected for the remainder of 2026, brokers are navigating a market defined more by patience than momentum.
VA applications offered the week's one bright spot, with the VA share rising to 12.6% from 12.3%, while the FHA share edged down to 17.1% from 17.3%.
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