Purchase Mortgage Applications Sit 16% Below Last Year as the 30-Year Contract Rate Hits 7.5%

Home-purchase mortgage applications were 16% lower in the week ending October 9 than a year earlier, according to the Mortgage Bankers Association (MBA), while the average contract rate on a 30-year fixed loan rose to 7.5%, its highest since November 2023. The figures come from the MBA’s weekly survey, released October 14 and reported by HousingWire.

A second MBA release a day later pointed the same way for new construction: applications for new-home purchase mortgages were down 8.3% from a year earlier in September. Together, the two reports show how a rate that has climbed for weeks is showing up in the number of people actually applying for loans.

What the weekly survey shows

The MBA’s overall applications index fell 2.7% from the prior week on a seasonally adjusted basis. The purchase index dropped 4% for the week and stood 16% below the same week in 2025. Refinancing was quieter still: the refinance index slipped 0.4% on the week and was 56% below a year ago, a pattern consistent with many existing borrowers already holding a lower rate than the market now offers. Refinances made up 37.7% of applications.

On rates, the MBA’s 30-year fixed contract rate for conforming loans edged up to 7.5% from 7.49%. The 15-year rate was 6.87%, a 30-year FHA loan averaged 7.19%, and the 5/1 adjustable-rate mortgage averaged 6.54%. Adjustable-rate loans accounted for 10.5% of applications, the highest share since October 2025. The MBA’s Joel Kan attributed that rise to borrowers looking for lower monthly payments, per HousingWire. A separate gauge cited in the same report, the Xactus Mortgage Intent Index, held at 102.7, roughly 20% below its level a year ago.

New-home buyers feel the rate first

The MBA’s Builder Application Survey, published October 15, estimated that new-home purchase applications fell 8.3% in September from a year earlier and 8% from August. These figures are not seasonally adjusted. Using those applications, the MBA estimated new-home sales at an annualized pace of about 584,000 in September, down 12% from 664,000 in August and, in the association’s words, the weakest pace since April 2020.

Two caveats apply. The sales estimate is the MBA’s own model built from lender data, not the Census Bureau’s official count, so the two can differ. And one month of applications is a snapshot rather than a trend. The mix of loans moved too: conventional loans made up 50.2% of new-home applications, FHA 34.7%, VA 14.1% and USDA 1%. The average loan size edged up to $374,724 from $373,194. Kan said higher rates in September hit first-time buyers hardest and trimmed the FHA share.

Two rate measures, two numbers

Readers following mortgage rates will notice that 7.5% and 7.40% describe nearly the same market. Freddie Mac’s weekly survey, published October 15, put the 30-year fixed average at 7.40%, unchanged from the previous week, and the 15-year at 6.71%, compared with 6.27% and 5.52% a year ago. The MBA figure is an average contract rate drawn from lender applications for conforming loans; Freddie Mac’s comes from its own weekly survey. Methods differ, so neither is a quote you can count on.

Behind both sits the Federal Reserve. AP reported that the Fed raised its short-term rate in September to about 3.9%, its first increase in three years, and that most Wall Street investors expect it to hold at its October 27 to 28 meeting, with a possible increase in December. Mortgage rates track longer-term bond yields rather than the Fed’s rate directly, but expectations about the Fed feed into both.

What a rate gap does to a monthly payment

Here is a simple illustration, not a quote. On a hypothetical $600,000 30-year fixed loan, principal and interest at 7.40% come to about $4,154 a month. At last year’s 6.27%, the same loan would cost about $3,702, a difference of roughly $452 a month, or close to $5,400 a year. Property taxes, homeowners insurance and any mortgage insurance would come on top, and those vary widely by town, school district and property.

Questions worth bringing to a lender

Neither report says whether buyers should act now or wait; no one can promise where rates go from here. What they offer is context for the conversations buyers and sellers are already having. Some questions that come up when rates are high:

• What is my payment at several rates? Ask for estimates at today’s rate and a point or two on either side, so you know your range before making an offer.
• Can the rate be locked, and for how long? Lock terms, fees and extension costs differ by lender.
• If I am considering an adjustable-rate loan, what are the caps? Ask for the initial period, how often the rate can change, and the maximum it can reach, then compare the worst case with your budget.
• What other loan types fit my situation? Conventional, FHA, VA and other programs have different down payment, insurance and eligibility rules, and a lender can explain which you may qualify for.

Sellers can look at the same numbers from the other side. When fewer buyers are applying, pricing and presentation tend to matter more, and a local agent can show which homes in your area are selling and at what prices. Buyers and sellers are welcome in every neighborhood; decisions about where to buy or what to ask should rest on your own budget, needs and the property itself.

This article is general information, not legal, tax or financial advice. Consult a licensed mortgage professional, real estate attorney and tax adviser about your own situation.

Sources

• Mortgage Bankers Association, “Mortgage Applications Decrease in Latest MBA Weekly Survey” (Oct. 14, 2026): newslink.mba.org (organization statement)
• HousingWire (Sarah Wolak), report on the MBA weekly applications survey (Oct. 14, 2026): housingwire.com
• Mortgage Bankers Association, “September New Home Purchase Mortgage Applications Decreased 8.3 Percent” (Oct. 15, 2026): newslink.mba.org (organization statement)
• Freddie Mac, Primary Mortgage Market Survey, week of Oct. 15, 2026: freddiemac.com
• AP via PBS NewsHour, “Inflation worsened last month to 3.7% as midterm elections near” (Oct. 14, 2026), for Federal Reserve context: pbs.org