-- Mortgage applications fell by 4.4% in the week ended May 1 as higher 30-year fixed mortgage rates lowered both refinancing activity and new purchases, according to Mortgage Bankers Association data released Wednesday.
This follows a 1.6% decrease in overall activity in the week ended April 24.
Applications for refinancing loans fell by 5%, while new purchase applications fell by a seasonally adjusted 4%.
The average contract interest rate for 30-year fixed mortgages with loan balances of $832,750 or less rose to 6.45% from 6.37% in the previous week, the highest in a month due to the ongoing conflict in the Middle East according to MBA.
"As expected, elevated rates and shrinking refinance incentives continued to weigh on activity, with refinance applications declining again from the prior week -- most notably for conventional and VA loans," said Joel Kan, MBA's vice president and deputy chief economist. "The refinance share of applications was the lowest since August 2025."
Kan added that overall activity is still higher than a year ago and that the average loan size for purchases was the highest on record.
"This increase could indicate that potential first-time buyers, and buyers looking for homes at lower price points, might be the most hesitant to move forward given the economic uncertainty and higher rates," Kan said.