Mortgage Applications Fall as Rates Climb to Highest Level Since August ‘25 — Evening Brief – 05.27.26

Mortgage application volume pulled back sharply for the week ending May 22, 2026, as climbing interest rates dampened refinancing activity and weighed on borrower sentiment, according to data released by the Mortgage Bankers Association.

The Market Composite Index declined 8.5% on a seasonally adjusted basis from the prior week and 9% on an unadjusted basis. The Refinance Index fell 18% week-over-week, though it remained 19% above the same week a year ago. The seasonally adjusted Purchase Index edged down 0.4%, while the unadjusted Purchase Index declined 2% but stayed 5% above year-ago levels.

“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 VP and deputy chief economist. “With the rate now at 6.65%, many borrowers understandably backed away from refinancing last week.”

The pullback was broad-based across loan types. Conventional refinances declined 14%, FHA applications dropped 18%, and VA applications fell 34%. The refinance share of total applications slipped to 37.5% from 41.9% the prior week, its lowest share since June 2025.

On the purchase side, Kan noted that while applications were slightly lower across all loan types, activity continued to run ahead of last year’s pace. The average purchase loan size reached a new survey high of $473,600, as borrowers with smaller loan sizes pulled back in response to diminished purchasing power.

The average 30-year fixed rate on conforming balances rose to 6.65% from 6.56%, while jumbo loan rates climbed to 6.68% from 6.58%. FHA-backed 30-year rates increased to 6.31% from 6.24%, and the 15-year fixed rate edged up to 5.97% from 5.93%. The 5/1 ARM average rose to 5.81% from 5.76%.

The ARM share of total applications dipped to 9.4%, while the FHA share fell to 17.2%, and the VA share declined to 13.2% of total applications.