Refinance Drives Mortgage Growth
US Mortgage Applications Rise 1% as Refinancing Jumps Amid Stagnant Purchase Demand
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Key Points
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Refinance activity led the week, with the Refinance Index up 3% week over week and 17% higher than a year earlier; the refinance share rose to 41.5% of total applications from 40.3%.
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Purchase activity slipped modestly: the seasonally adjusted Purchase Index fell 1% week over week, while the unadjusted Purchase Index declined 12% week over week but remained 3% above the year-ago level.
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Government-backed loan mix: FHA share rose to 17.9% of total applications, VA share fell to 12.3%, and USDA share rose to 0.5%.
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Rates: The 30-year fixed-rate conforming loan (balances of $832,750 or less) averaged 6.59% with 0.63 points; the 30-year jumbo rate stood at 6.52% with 0.58 points.
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Juneteenth holiday adjustment was applied to the unadjusted indices in the MBA weekly survey, contributing to the observed changes in the unadjusted figures.
US mortgage applications rose 1% for the week ending June 19, 2026, partially clawing back the prior week's 3.8% drop, according to Mortgage Bankers Association data released June 24. The rebound was driven almost entirely by refinancing, as 30-year fixed rates held near 6.59% — high enough to keep buyers on the sidelines but low enough to tempt some homeowners to lock in savings.
Total mortgage volume is now running 8% above year-ago levels, HousingWire reported. But that headline masks a split market: refinancers are jumping on small rate dips, while would-be buyers are holding back amid sky-high home prices and an uncertain Fed.
Refinancing Surges as Buyers Stay on Sidelines
The Refinance Index climbed 3% week-over-week and is now 17% higher than a year ago, HousingWire reported. The refinance share of total applications rose to 41.5%, up from 40.3% the prior week. Homeowners are treating every 1-2 basis point dip as an opportunity to lock in before rates move higher.
Purchase applications told a different story. The seasonally adjusted Purchase Index fell 1% week-over-week, according to World Property Journal. The unadjusted Purchase Index dropped 12% — though part of that decline reflects the Juneteenth holiday shortening the work week by one day. Year-over-year, purchase volume is still 3% ahead of 2025 levels.
Rates Stuck Near 6.6% Despite Fed Holding Steady
The average 30-year fixed conforming loan — for balances at or below $832,750 — came in at 6.59% with 0.63 points, Sharecast reported. Jumbo loans averaged 6.52% with 0.58 points. Rates dipped just one basis point on the week, barely enough to move the needle for buyers.
The Federal Open Market Committee held the federal funds rate steady at 3.50%–3.75% at its June 16–17 meeting. New Fed Chair Kevin Warsh dropped the central bank's prior easing bias entirely, HousingWire noted. MBA Chief Economist Mike Fratantoni said rates "changed little" despite the hawkish tone, but the shift is keeping mortgage borrowing costs elevated.
Inflation Spike and New Fed Chair Cloud the Outlook
Mortgage rates are not falling because inflation is not cooperating. US inflation hit 4.2% in May — a multi-year high — driven by an energy shock tied to the US-Iran conflict and a closure of the Strait of Hormuz. A ceasefire and the reopening of the strait gave yields a brief reprieve in mid-June, CU Today reported. But analysts warn the relief may be short-lived.
Broker Melissa Cohn of William Raveis Mortgage cautioned that the ceasefire is not a "magic bullet" for inflation. "There's a lot of damage inflation-wise," she said. "It's going to take a long time to undo." Bank of America Global Research now expects three rate hikes in 2026 — a full reversal from earlier forecasts of a pause.
FHA Borrowers Gain Ground as Affordability Bites
The loan mix shifted toward government-backed products. The FHA share rose to 17.9% of total applications, while the VA share slipped to 12.3% and the USDA share ticked up to 0.5%, according to World Property Journal. FHA loans require lower down payments, making them attractive when home prices are near record highs — the national median hit $429,300 in May.
Adjustable-rate mortgages made up 8.5% of applications. MBA Deputy Chief Economist Joel Kan said buyers remain "hesitant because of higher prices, increased economic uncertainty, and mortgage rates averaging over 6.5 percent." Until rates drop meaningfully or inventory expands, purchase demand is unlikely to break out of its current range.
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