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The demand for home loans took a tumble after three consecutive weeks of increases. Mortgage applications decreased 10% for the week ending July 11, 2025, according Mortgage Bankers Association (MBA).
The decrease comes after the Freddie Mac 30-year mortgage interest rates ticked up to 6.72% last week—it was the first increase since late May.
The Market Composite Index, which measures mortgage loan application volume, decreased 10% on a seasonally adjusted basis. On an unadjusted basis, the index increased 13% compared to the prior week.
The refinance index decreased 7% from the previous week and was 25% higher year-over-year.
The seasonally adjusted purchase index decreased 12% from a week earlier. The unadjusted purchase index increased 11% from the week prior and was 13% 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.
There was a slight increase in homeowners who decided to refinance—the refinance share of mortgage activity increased to 41.1% of total applications from 40% the week prior.
The adjustable-rate mortgage (ARM) share of activity decreased 0.6% from the previous week to 7.1% of total applications.
FHA (Federal Housing Administration) applications increased 19% from 17.9% the week prior. VA loan applications decreased 12.6% from 13% the previous week. USDA applications slightly dipped to 0.5% from 0.6% a week earlier.
“Treasury yields finished higher last week on average despite an intra-week drop, driven partly by renewed concerns of the impact of tariffs on the economy,” says Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As a result, mortgage rates rose after two weeks of declines, which contributed to slower application activity.”
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Contract rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.82% from 6.77% , with points remaining unchanged at 0.62% (including origination fee) for 80% loan-to-value ration (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) increased to 6.75% from 6.69%, with points increasing to 0.66 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.52% from 6.51%, with points increasing to 0.86 from 0.80 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 6.16% from 6.04%, with points remaining unchanged at 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
For 5/1 ARMs, the average contract interest rate increased to 6.08% from 6.01% the week prior, with points decreasing to 0.45 from 0.73 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
“Jumbo rates were lower than conventional rates for the third straight week, as some depositories may be positioning themselves for growth in balance sheet lending,” 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.