Mortgage applications pulled back last week as rising rates weighed on homebuyer demand, while refinance activity remained largely flat. The Mortgage Bankers Association (MBA) reported a 2.3% decrease in total application volume on a seasonally adjusted basis for the week ending May 15. The decline was driven primarily by softer purchase activity. The seasonally adjusted Purchase Index fell 4% from the prior week, though purchase demand remained 8% higher than the same week one year ago. Refinance activity was mostly unchanged despite the rise in rates. The Refinance Index dipped just 0.1% week over week but remained 35% above year-ago levels. The average 30-year fixed mortgage rate increased to 6.56% from 6.46%, reaching its highest level in seven weeks. According to MBA, concerns surrounding inflation, higher fuel costs, and growing worries over global public debt helped push Treasury yields — and mortgage rates — higher during the week. MBA’s Joel Kan said, ” Overall applications were down to the lowest level in five weeks as purchase borrowers pulled back across conventional and government loan types. Refinance applications were essentially unchanged, with a decline in government refinances and an increase in conventional refinancing, likely as the increase in rates came late in the week. ” Kan also noted that adjustable-rate mortgages gained traction as borrowers looked for lower-rate alternatives. ARM loans accounted for nearly 10% of total applications, the highest share since October 2025, with the average ARM rate sitting roughly 80 basis points below the 30-year fixed rate.