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The mortgage market continues its up and down ride, as mortgage applications inched up 1.1% for the week ending June 20, 2025, according to Mortgage Bankers Association (MBA). This increase comes after home loan applications decreased the week prior.
The Market Composite Index, which measures mortgage loan application volume, increased 1.1% on a seasonally adjusted basis. On an unadjusted basis, the index decreased 10% compared to the week prior.
“The combination of the ongoing conflict in the Middle East, current economic conditions, and last week’s FOMC meeting resulted in slightly lower Treasury rates. However, mortgage rates still edged higher but remained in the same narrow range, with the 30-year fixed rate increasing to 6.88 percent last week,” says Joel Kan, MBA’s vice president and deputy chief economist.
The refinance index increased by 3% from the previous week and was 29% higher than the same week one year ago.
The seasonally adjusted purchase index decreased 0.4% from a week earlier. The unadjusted purchase index decreased 11% compared with the prior week and was 12% higher than the same week a year ago. These numbers reflect the number of mortgage applications for home purchases, adjusted for seasonal fluctuations in the housing market.
For homeowners refinancing, there was an increase in mortgage activity to 38.4% of total applications, compared to 37.3% a week prior.
The adjustable-rate mortgage (ARM) share of activity decreased to 6.9% of total applications.
FHA (Federal Housing Administration) applications increased to 19.3% from 17.8% the week prior. The VA applications saw an decreased to 11.7% from 12.1% the week prior. USDA applications decreased to 0.5% from 0.6% from the week prior.
“Applications increased slightly overall driven by FHA refinances, but conventional applications saw declines over the week,” says Kan.
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Contract rates
The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($806,500 or less) increased to 6.88% from 6.84%, with points decreasing to 0.63 from 0.66 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed mortgages with jumbo loan balances (greater than $806,500) increased to 6.88% from 6.81%, with points decreasing to 0.60 from 0.63 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed mortgages backed by the FHA increased to 6.59% from 6.57%, with points decreasing to 0.85 from 0.90 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 15-year fixed mortgages continues to decrease 6.11% from 6.14%, with points increasing to 0.74 from 0.70 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
For 5/1 ARMs, the average contract interest rate increased to 6.16% from 6.10%, with points decreasing to 0.54 from 0.57 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
“The average loan size for purchase applications declined to $436,300, the lowest level since January 2025, driven by decreasing conventional purchase loan sizes,” says Kan.
Mortgage rates calculated
Mortgage rates are calculated by various factors in the economy, and the length of your loan will also figure into the mortgage rate you qualify for.
The 30-year mortgage rate is tied to the yield of the 10-year Treasury note, according to Fannie Mae. As the yield on the 10-year Treasury note moves, mortgage rates follow.
The yield on the 10-year Treasury note is determined by expectations for shorter-term interest rates in the economy over the duration of a bond, plus a term premium.