Mortgage applications fell by 8.5% in the week ended May 22 as a sharp increase in mortgage rates pushed down refinancing activity and new home applications, according to Mortgage Bankers Association data released Wednesday.
This follows a 2.3% decrease in overall activity in the week ended May 15.
Applications for refinancing loans declined by 18%, while new purchase applications fell by a seasonally adjusted 0.4%.
The average contract interest rate for 30-year fixed mortgages with loan balances of $832,750 or less rose to 6.65% from 6.56% in the previous week.
"The 30-year fixed rate has increased 30 basis points over the past five weeks to its highest level since August 2025," said Joel Kan, MBA's vice president and deputy chief economist. "With the rate now at 6.65%, many borrowers understandably backed away from refinancing last week."
At the same time, purchase applications ticked lower but were still above their year-ago level.
"The average loan size for a purchase application reached another survey high at $473,600, as borrowers with smaller loan sizes were less active given the higher rate environment and its negative impact on their purchasing power," Kan said.