Purchase Activity Slips Despite Lower Mortgage Rates

Mortgage application activity increased again in August, supported by lower interest rates. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, rose 5.0% from July on a seasonally adjusted basis and was 18.3% higher than a year ago.

The average contract interest rate for 30-year fixed mortgages fell 13 basis points to 6.70%, the lowest level since November. Despite the decline, purchase applications slipped 3.0% month-over-month, while refinancing activity rose 15.6%. Compared to August 2024, purchase and refinance applications were up 19.4% and 16.9%, respectively.

Loan sizes posted mixed results. The average loan amount across all loan types increased 2.7% to $386,600. Purchase loan sizes edged up 0.1% to $429,200, while the average refinance loan size jumped 11.8% to $334,600. The average size of adjustable-rate mortgage (ARM) loans decreased 1.3% to $957,500 from $945,200.