Mortgage applications remain sensitive to changes in interest rates, however, lower prices are encouraging some home purchases. Even a few basis points can affect decisions about home purchases or refinancing an existing loan. Despite a small uptick in the 30-year fixed mortgage rate, homebuyers are finding an opportunity with prices somewhat lower. It is typical for prices of existing homes to rise in the first half of the year and decline in the second half. This annual pattern may support some home sales in the coming months, although the market will still be constrained by weak consumer confidence and worries about job security.

MBA Deputy Chief Economist Joel Kan said, After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700. With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week.

The MBA mortgage applications index is 0.8 percent higher in the July 18 week. It is 1.9 percent higher than four weeks ago and 22.1 percent higher than a year earlier. The purchase index is 3.4 percent higher in the current week and 0.1 percent lower than four weeks ago and 22.5 percent higher than a year earlier. The refinancing index is 2.6 percent lower and is 4.8 percent higher than four weeks ago and 21.6 percent higher than a year earlier. In the July 18 week, refinancing accounted for 39.6 percent of mortgage applications compared to 41.1 percent in the prior week.

The fixed-rate mortgage index is 0.7 percent higher in the July 18 week. It is 1.6 percent higher than four weeks ago and 20.2 percent higher than this week last year. The adjustable-rate mortgage index is 2.6 percent higher and is 6.5 percent higher than four weeks ago and 52.6 percent higher than a year ago.

The contract rate for a 30-year fixed-rate mortgage is 6.84 percent in the current week. This is 2 basis points higher than the prior week, 4 basis points lower than four weeks ago, and 2 basis points higher than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 6.01 percent in the week. This is 7 basis points lower than the prior week, 15 basis points lower than four weeks ago, and 18 basis points lower than a year earlier. In the July 18 week, adjustable-rate mortgages accounted for 7.2 percent of mortgage applications compared to 7.1 percent in the prior week.

The Mortgage Bankers' Association compiles various mortgage loan indexes. The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

This provides a gauge of not only the demand for housing, but economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as the Mortgage Bankers Association purchase applications, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once a home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month.

Since the economic backdrop is the most pervasive influence on financial markets, housing construction has a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the MBA purchase applications index carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.