Quick Read
- Homebuyer demand for mortgages remains near 2025 highs despite a slight weekly decline, with purchase loan applications up 19% year-over-year per the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey.
- MBA Deputy Chief Economist Joel Kan notes FHA purchase applications rose 5%, reflecting continued buyer interest in lower downpayment options amid improving housing inventory and affordability.
- Refinance applications increased 14% week-over-week and 88% year-over-year, driven by FHA rates hitting their lowest since September 2024, accounting for 58.2% of all mortgage applications last week.
- Mortgage rates stabilized near 6.12%-6.25%, close to 2025 lows; forecasts diverge with Fannie Mae predicting sub-6% rates by end-2026, while MBA expects an average rate of 6.4% next year.
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With mortgage rates still hovering near 2025 lows, purchase loan applications hit their second-highest level of the year last week after adjusting for seasonal factors.
Homebuyer demand for mortgages remained near its highest level of the year last week after seasonal adjustments as mortgage rates stayed near 2025 lows seen in October, according to lender data tracked by the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey showed demand for purchase loans was down by a seasonally adjusted 2 percent from a week ago, when it hit a new 2025 high. Looking back a year, applications for purchase loans were up 19 percent.
Joel Kan
“Conventional purchase applications were down for the week, but there was a 5 percent increase in FHA purchase applications as prospective homebuyers continue to seek lower down payment loans,” MBA Deputy Chief Economist Joel Kan said, in a statement.
“Overall purchase applications continued to run ahead of 2024’s pace as broader housing inventory and affordability conditions improve gradually.”
Homebuyer demand near 2025 high
Source: MBA Weekly Applications Survey
At 181.6 for the week ending Dec. 5, the MBA’s seasonally adjusted purchase loan index was tied for its second-highest level of the year. The index hit a 2025 high of 186.1 during the week ending Nov. 28 after adjusting for the Thanksgiving holiday.
With mortgage rates still hovering near their lows for the year, requests to refinance were up 14 percent last week when compared to the week before, and 88 percent from a year ago.
“Conventional refinance applications were up almost 8 percent and government refinances were up 24 percent as the FHA rate dipped to its lowest level since September 2024,” Kan said.
Ref requests accounted for 58.2 percent of all mortgage applications last week, up from 53 percent the week before.
Mortgage rates remain near 2025 low
Since spiking to nearly 7 percent in April and May, mortgage rates have come down gradually, hitting a 2025 low of 6.12 percent on Oct. 28, according to lender data tracked by Optimal Blue.
At 6.25 percent Tuesday, rates on 30-year fixed-rate conforming mortgages were at their highest level so far this month, but up only 13 basis points from their 2025 low (a basis point is one hundredth of a percentage point). Mortgage rates touched 6.25 percent twice in November.
But the outlook for further declines in mortgage rates is mixed, as Federal Reserve policymakers sift through economic data and try to decide whether inflation or rising unemployment are the bigger threat.
The Fed on Wednesday cut short-term interest rates for the third time this year, but issued projections showing policymakers expect to make only one more 1/4 percentage point cut next year and another in 2027.
The central bank doesn’t have direct control over mortgage rates, which surged by a full percentage point at the end of 2024 as the Fed cut short-term rates by an equal amount.
Mortgage rate forecasts diverge
Source: Fannie Mae and Mortgage Bankers Association November 2025 forecasts.
Fannie Mae economists predict rates on 30-year fixed-rate loans will fall below 6 percent by the end of next year, but MBA forecasters expect they’ll average 6.4 percent in 2026.
Futures contracts that track the ICE U.S. Conforming 30-year Fixed Index imply that as of Nov. 25, investors were pricing in expectations that mortgage rates will drop into the low 6 percent range next spring.
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