Mortgage Services

Mortgage application activity fell last week, reversing prior momentum and highlighting continued softness in both purchase and refinance demand. The Mortgage Bankers Association’s weekly survey showed a 3.8% decline in the seasonally adjusted Composite Index for the week ending July 25, 2025. “Mortgage applications fell to their lowest level since May, with both purchase and refinance activity declining over the week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The 30‑year fixed rate was little changed at 6.83%, but high enough to deter refinancing, pushing the refinance index lower for the third straight week. Purchase applications decreased by almost 6 percent, as conventional, FHA, and VA purchase loans declined despite slowing home‑price growth and rising inventory.” The Refinance Index dropped 1% week‑over‑week, though it remains about 30% above last year’s level. The Purchase Index posted a 6% weekly decrease, but still sits roughly 17% higher than the same week in 2024. Purchase applications declined across the board, while refinance activity also softened. The 30‑year fixed rate held steady at 6.83% after a slight drop from the week prior. Mortgage Rate Summary: 30yr Fixed: 6.83% (from 6.84%) | Points: 0.60 (down from 0.62) 15yr Fixed: 6.12% (down from 6.14%) | Points: 0.64 (down from 0.69) Jumbo 30yr: 6.74% (down from 6.75%) | Points: 0.51 (down from 0.70) FHA: 6.56% (up from 6.52%) | Points: 0.83 (up from 0.79) 5/1 ARM: 6.22% (up from 6.01%) | Points: 0.51 (up from 0.28)

The National Association of Realtors’ Pending Home Sales Index (PHSI)—which tracks contract signings on existing homes—has remained rangebound for more than two years, constrained by affordability pressures and elevated mortgage rates. This week’s release showed a decline after last month’s modest gain, reflecting persistent market softening. Pending home sales fell by 0.8% in June, following May’s 1.8% rise. The index is now 2.8% lower than a year ago , but remains far below pre‑2022 levels. Zooming out, contract activity remains stuck in a narrow band. The index hasn’t topped 80 since the summer of 2022, indicating a sluggish, rate‑constrained housing market. “The data shows a continuation of small declines in contract signings despite inventory in the market increasing,” said NAR Chief Economist Lawrence Yun. The drop in June extends weakness even as more homes come online. Regional Breakdown (Month‑Over‑Month) Northeast: +2.1% Midwest: −0.8% South: −0.7% West: −3.9% Regional YoY Change Northeast: 0.0% (flat) Midwest: −0.9% South: −2.9% West: −7.3% All regions except the Northeast posted declines month-over-month. Year-over-year, only the Northeast remains unchanged. The West saw the steepest annual drop at −7.3%.

Both the FHFA and Case‑Shiller released the latest update on home price appreciation this week. Actually, in the current case, it's more like home price depreciation (at least in month over month terms). This is a bit confusing because average prices were higher versus the previous month, but that is virtually always true at this time of year.  Seasonal adjustments are very useful for data like home prices (which have a reliable cadence that follows the typical homebuying seasons).  It's after adjusting for seasonality that we see emerging signs of weakness.  FHFA House Price Index (seasonally adjusted, MoM) May: −0.2%; April was revised from −0.4% to −0.3% YoY: +2.8% from May 2024 to May 2025 Monthly figures varied regionally: Middle Atlantic showed the steepest fall at −0.8%, while West South Central and New England saw modest gains of +0.3%. All nine census divisions remain positive YoY, ranging from +0.6% to +5.9%. Case‑Shiller National Index (unadjusted) YoY: +2.3% in May, down from +2.7% in April MoM (raw): +0.4% MoM (seasonally adjusted): −0.3% This marks the smallest annual national gain since July 2023 and the third consecutive monthly decline in seasonally adjusted data. Seasonally Adjusted Comparison Table: FHFA vs Case‑Shiller (May 2025) Index MoM (SA) YoY FHFA HPI −0.2% +2.8% Case‑Shiller −0.3% +2.3%