Buyers shrug off rates, push mortgage apps higher

Mortgage activity increased last week, despite rates jumping to their highest point in nearly a month.

The Mortgage Bankers Association's Market Composite Index found mortgage applications rose 1.7% on a seasonally-adjusted basis from one week prior for the period ending May 8. The index climbed 2% on an unadjusted basis.

This comes after the index fell 4.4% and 1.6% in each of the last two weeks, led by notable drops in the refinance index.

"Purchase applications were higher over the week and 7% ahead of last year's pace, with all loan types showing increases in purchase activity, as potential homebuyers shrugged off the current economic and mortgage rate uncertainties and returned to the market," said Joel Kan, MBA's vice president and deputy chief economist, in a press release Wednesday. 

Compared with the week prior, purchase applications spiked 4% on an unadjusted basis, while refinance activity again declined 1% week over week, headed by conventional and Department of Veterans Affairs refinancing, but was still up 28% year over year, according to the release.

New-home purchases, in particular, surged in March, rising 11% on an annual basis and 26% month over month, the MBA's monthly builders survey found.

Refinancing activity has been suppressed recently due to another string of increases in mortgage rates this spring. After three consecutive weeks of drops from the highest point this year, the 30-year fixed-rate mortgage has jumped back up to 6.37% following two weeks of seven-basis-point hikes, according to Freddie Mac.

As a result, the refinance share of mortgage activity decreased to 40.8% of total applications, down from 42% the week prior and the lowest share since July 2025. The adjustable-rate mortgage share of activity stayed the same at 8.8% of total applications, the release said.

The share of loans insured by the Federal Housing Administration relative to total applications increased to 17.9% from 17.7% the week prior. Loans backed by the VA and U.S. Department of Agriculture saw their portions remain unchanged at 14.9% and 0.5%, respectively, according to the release.

Four of the five types of mortgages the MBA tracks saw an increase in interest rates last week compared with the week prior, including:

• 30-year fixed-rate mortgages with conforming loan balances, 6.46% from 6.45%
• 30-year fixed-rate mortgages with jumbo loan balances, 6.48% from 6.47%
• 30-year fixed-rate mortgages backed by the FHA, 6.16% from 6.12%;
• Five-year ARMs, 5.7% from 5.6%.
  

The average contract interest rate for 15-year fixed-rate mortgages did not change from 5.83% the previous week.