A sharp decline in refinancing sparked by rising mortgage rates and a new wave of economic uncertainty caused mortgage application activity to sink during the week ending March 13, according to data from the Mortgage Bankers Association (MBA).
“Mortgage rates continued to move higher, driven by increasing Treasury yields as the conflict in the Middle East kept oil prices elevated, along with the risk of a broader inflationary shock. Mortgage rates increased across the board, with the 30-year fixed rate rising to 6.30%, the highest rate since December 2025,” said Joel Kan, MBA’s vice president and deputy chief economist. “Rates were around 20 basis points higher than they were two weeks ago and this caused a reversal in refinance activity, particularly for conventional refinance applications, which decreased 27% over the week. Government refinances also declined but by 5%, as FHA rates have not increased quite as rapidly.
The Market Composite Index, the MBA’s measure of mortgage loan application volume, dropped by 10.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased by an even 10%.
The Refinance Index crashed by 19% from the previous week and was 69% higher than the same week one year ago, while the refinance share of mortgage activity decreased to 52.3% of total applications from 57.8% in the previous week.
The seasonally adjusted Purchase Index inched up by 1% from one week earlier while the unadjusted index increased 2% and was 12% higher than the same week one year ago.
“Purchase applications remained steady despite the higher rates, with conventional purchase applications unchanged and growth in both FHA and VA segments,” Kan added. “Overall purchase applications remained ahead of last year’s pace, supported by higher inventory and slowing home-price growth in many markets.”
Among the federal programs, the FHA share of total applications increased to 19.4% from 17.1% the week prior and the VA share of total applications increased to 16.7% from 16.1% while the USDA share of total applications remained unchanged at 0.4%.
