Summary
Mortgage applications fell 4.1% for the week ending Sept. 11 as MBA’s conforming 30-year contract rate rose to 6.97%. Purchase applications were 19% below a year earlier and refinance volume fell 9% for the week.
Mortgage demand weakened for a second straight week as borrowing costs moved back toward 7%, reinforcing the pressure higher bond yields are putting on both home purchases and refinancing.
The Mortgage Bankers Association’s Market Composite Index fell 4.1% on a seasonally adjusted basis for the week ending Sept. 11. MBA’s average contract rate for 30-year fixed mortgages with conforming loan balances rose to 6.97% from 6.85% the prior week.
The latest report is a new weekly data point, not a repeat of the prior week’s decline. WRE News reported that applications fell 2.7% in the week ending Sept. 4. The Sept. 11 results show the deterioration continuing as rates moved another 12 basis points higher.
Purchase demand is holding up better week to week — but not year over year
The seasonally adjusted Purchase Index declined 1% from the prior week. On an unadjusted basis, however, purchase applications were 19% below the same week a year earlier.
That year-over-year comparison is especially important for housing professionals. A modest weekly movement can make purchase demand appear relatively stable, but the annual gap shows how much higher financing costs and affordability pressure have changed the market from last fall.
MBA Deputy Chief Economist Joel Kan said higher mortgage rates caused many prospective buyers to pause purchase decisions. He pointed to market concerns about rising energy prices, persistent inflation and future monetary policy as factors that pushed bond yields and mortgage rates higher.
The survey covers more than 75% of U.S. retail residential mortgage applications and has been conducted weekly since 1990.
Refinance demand took the larger weekly hit
The Refinance Index fell 9% from the previous week and was 65% lower than the same week one year ago.
Refinancing accounted for 39.4% of total mortgage applications, down from 40.9% the previous week. That shift reflects a familiar rate-cycle problem: when prevailing mortgage rates move higher, the pool of homeowners who can reduce their rate through a refinance contracts quickly.
The comparison with 2025 is particularly stark. Refinance activity benefited last year as mortgage rates fell through the second half of the year. The current market is moving in the opposite direction.
Government lending remains an important part of the mix
The FHA share of total applications slipped to 16.9% from 17.2% the previous week. The VA share increased to 12.4% from 12.0%, while USDA applications remained a small share of overall activity.
The average contract rate for 30-year FHA mortgages increased to 6.62% from 6.53%, according to MBA.
Those product shifts matter as affordability worsens because FHA and VA financing can serve borrowers whose down-payment, credit or eligibility profiles differ from conventional borrowers. But government-backed products cannot eliminate the payment shock created when market rates rise broadly.
The Fed decision adds a new layer to the rate outlook
The application survey covers the week before the Federal Reserve’s Sept. 16 decision to raise the federal funds target range by 25 basis points to 3.75% to 4.00%.
That timing is important. The 6.97% MBA mortgage rate reflects market conditions before the Fed formally announced its first rate increase since 2023. Mortgage rates do not move one-for-one with the federal funds rate, but the bond market’s interpretation of inflation and future Fed policy directly affects mortgage pricing.
The Fed’s new projections show median headline PCE inflation of 3.7% in 2026, well above its 2% target. That leaves housing professionals watching whether Treasury yields remain elevated after the meeting or begin to retreat.
A difficult fall setup for transaction volume
The latest application data arrive alongside other signs of strain. Builder confidence fell to a 12-month low in September, and large builders are using price cuts and financing incentives more aggressively to keep buyers engaged.
For lenders and real estate professionals, the near-term equation is straightforward: rates near 7% reduce purchasing power, limit refinance opportunities and make marginal buyers more sensitive to price and monthly payment.
Inventory conditions and local pricing still vary widely, and a national application index cannot describe every market. But the second consecutive weekly decline shows that the latest rate move is not merely a financial-market story. It is already showing up in mortgage demand.
The next MBA weekly survey will provide the first fuller application read covering borrower behavior after the Fed’s September rate increase. That makes it an important test of whether demand stabilizes or the latest tightening produces another leg down.
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