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Last week’s dip in mortgage rates didn’t send homebuyers rushing to their lender, with purchase loan applications contracting by a seasonally adjusted 4 percent compared to the week before, according to a weekly survey of lenders by the Mortgage Bankers Association (MBA).
The latest MBA Weekly Mortgage Applications Survey, released Wednesday, found purchase loan demand was still up 18 percent from a year ago. However, some of that demand may not translate into sales, with Redfin reporting an unusual bump in cancelled purchase contracts in April.
The MBA survey showed requests to refinance were down 4 percent during the week ending May 30 when compared to the week before, but up 42 percent from a year ago.
Joel Kan
“Most mortgage rates moved lower last week, with the 30-year fixed rate declining to 6.92 percent and staying in the 6.8 percent to 7 percent range since April,” MBA Deputy Chief Economist Joel Kan said in a statement.
“Refinance activity fell across both conventional and government segments, and the overall average refinance loan size was the smallest since July 2024, as potential borrowers hold out for larger rate drops,” Kan said.
Redfin’s analysis of MLS pending-sales data showed 14 percent of homes that went under contract in April — about 56,000 properties — ended up not selling because their purchase agreements were cancelled.
That’s the second highest share of April cancellations in records dating back to 2017, Redfin said, after April 2020, when the pandemic put the brakes on many closings.
Redfin said purchase agreements are being cancelled at a higher rate than usual during the spring homebuying season due to economic and political uncertainty, a surge of inventory in many markets, and elevated home prices and mortgage rates.
Mortgage rates on the rebound
Since hitting a 2025 low of 6.48 percent on April 4, rates on 30-year fixed-rate conforming mortgages have rebounded above 6.8 percent for most of May, according to lender data tracked by Optimal Blue.
Inflation continued to move closer to the Federal Reserve’s 2 percent target in April, but central bank policymakers have been reluctant to cut short-term interest rates as they continue to assess the impacts of the Trump administration’s policies in areas including tariffs, immigration, taxes and regulation.
Purchase loan demand peaked in April
Even after adjusting for heightened demand during the spring homebuying season, purchase loan requests peaked in April, MBA data shows.
At 155 for the week ending May 30, the MBA’s seasonally adjusted purchase index was at its lowest reading since the week ending April 25. The index is now down 18 points from its 2025 high of 172.7 registered during the week ending April 4, but 27 points higher than a low for the year registered in January.
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