Mortgage application volumes posted a second consecutive week of declines through mid-September, the Mortgage Bankers Association (MBA) reported Wednesday.

The association’s Market Composite Index, a measure of mortgage loan application volumes, declined 4.1% on a seasonally adjusted basis over the week ending Sept. 11, dragged down by significant year-over-year decreases in both purchase and refinance demand.

“After adjusting for the Labor Day holiday, purchase applications dipped relative to the week prior as higher mortgage rates caused many buyers to pause their purchase decisions,” said Joel Kan, deputy chief economist of the MBA, in a statement alongside the latest figures.

Advertisement

Higher mortgage rates have steadily suppressed home sales this summer. The pace of existing-home sales fell to its lowest level in 14 months in August, according to the National Association of Realtors, which marked the third consecutive month of declining sales.

Average mortgage rates for 30-year fixed-rate home loans jumped to 6.97% over the past week, according to MBA data. That is the highest level since May 2025 and up from 6.85% the prior week. Average rates have been above 6.5% for 18 consecutive weeks after spending January and February around 6%.

Mortgage rates averaged 6.39% a year ago, per MBA data. The last time rates were around that level was late April, with 30-year rates steadying around 6.8% for the entire month of August.

“Ongoing market concerns over spiking energy prices, persistently high inflation and future monetary policy pushed bond yields and mortgage rates higher last week,” added Kan.

The seasonally adjusted purchase index only fell 1% from the previous week, but unadjusted purchase demand was down a whopping 19% from the same week a year ago amid elevated borrowing costs. Refinance application volumes decreased 9% over the week and were 65% lower than a year ago.

Rising rates have also put a large dent in year-over-year refinance demand as incentives for borrowers have diminished in recent months.

Refinances that accounted for about 41% of total application activity the previous week fell to around 39% of applications last week. That compares to a nearly 60% application share one year ago as rates steadily fell through the second half of 2025, ushering in the strongest period for refinance originations since early 2022.

Across production channels, the share of applications for government mortgages insured by the Federal Housing Administration fell just below 17% after rising just above 17% during the previous week. Average mortgage rates for FHA loans increased to 6.62% from 6.53%.

Applications for government mortgages backed by the Department of Veterans Affairs rose to 12.4% of overall activity from 12% the prior week.