US mortgage applications fall as 30-year rate holds near 6.6%

U.S. mortgage applications declined 2.2% last week as borrowing costs stayed near recent levels, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract rate on a 30-year fixed mortgage for conforming loan balances rose to 6.58% from 6.57%, leaving housing finance conditions tight for buyers and existing homeowners.

The MBA said it made an additional adjustment for the Independence Day holiday. Its weekly index tracks loan applications submitted through mortgage lenders and is closely watched as an early signal of housing demand, refinancing activity and household sensitivity to interest rates.

For 30-year fixed-rate mortgages with conforming balances of $832,750 or less, average points decreased to 0.64 from 0.65, including the origination fee, for loans with a 20% down payment, the MBA said. Points are upfront charges paid to the lender, typically expressed as a percentage of the loan amount, and can affect the total cost of borrowing even when the quoted interest rate changes only slightly.

Refinancing remains constrained

Applications to refinance an existing home loan fell 4% from the prior week, MBA data showed. They were still 8% above the same week a year earlier, when the 30-year fixed rate was 19 basis points higher, according to the report.

Refinancing demand tends to rise when borrowers can replace an existing mortgage with a meaningfully lower rate. CNBC reported that many lenders consider a rate reduction of at least 75 basis points necessary for the savings to justify refinancing costs, which can include origination charges, appraisal fees and other closing expenses.

Mike Fratantoni, the MBA’s senior vice president and chief economist, said in a release that refinance volume was lower because homeowners had limited incentive to act while rates remained elevated.

Purchase demand slips, but remains above last year

Applications for loans to buy homes fell 1% for the week and were 5% higher than in the comparable week of 2025, the MBA said. The decline came as rates have moved within a narrow band for more than a month, limiting the affordability relief that could bring additional buyers into the market.

Housing inventory has been rising and homes are taking longer to sell, giving buyers more leverage, according to CNBC. The network also reported that more real estate agents describe the market as balanced after several years in which sellers held the advantage.

Demand differed by loan type. Fratantoni said government-backed purchase volume increased modestly, led by a 5% gain in Department of Veterans Affairs purchase applications, while conventional purchase activity declined. Government-backed mortgages can offer lower down-payment options than many conventional loans, making them more relevant for borrowers with less cash available at closing.

Mortgage rates edged higher at the start of this week, according to a separate survey from Mortgage News Daily. Matthew Graham, chief operating officer at Mortgage News Daily, linked the move to renewed attention on Iran and reports suggesting the U.S. could again prevent Iran from exporting oil.

“Rising oil prices imply higher inflation. Higher inflation leads to higher rates, all else equal,” Graham wrote, according to Mortgage News Daily. Higher inflation expectations can put upward pressure on longer-term interest rates, including the yields that influence mortgage pricing.

This story draws on original reporting from CNBC.