Mortgage application activity edged lower last week, driven by purchases, but the decline was marginal compared to recent swings. According to MBA’s Weekly Applications Survey for the week ending October 17, total volume slipped 0.3% on a seasonally adjusted basis and 0.2% unadjusted. The Refinance Index rose 4% from the previous week and was 81% higher than the same week one year ago. The uptick was driven by a 6% increase in conventional refinances and a 12% jump in FHA refinances as borrowers capitalized on the lowest rates in a month. “The lowest mortgage rates in a month spurred an increase in refinance activity, including another pickup in ARM applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The refinance index increased 4 percent, driven by a 6 percent increase in conventional refinances and a 12 percent increase in FHA refinance applications, as borrowers remain attentive to these opportunities to lower their monthly mortgage payment. VA refinances bucked the trend and were down 12 percent.” Purchase applications decreased 5% from the previous week on a seasonally adjusted basis and 5% unadjusted, but remained 20% stronger than a year ago. While activity has cooled from early-fall highs, demand remains resilient amid improving inventory and a more stable rate environment. The refinance share of mortgage activity increased to 55.9% of total applications from 53.6% the week prior. The adjustable-rate mortgage (ARM) share climbed to 10.8%. The FHA share rose to 21.8%, while the VA share declined to 13.5%.

Existing-home sales climbed modestly in September, rising 1.5% to a seasonally adjusted annual rate of 4.06 million , according to the National Association of Realtors (NAR). Sales were also 4.1% higher than a year earlier as easing mortgage rates and better affordability began to lift demand. Even so, the market remains well below pre-pandemic norms as many owners stay put. “As anticipated, falling mortgage rates are lifting home sales,” said NAR Chief Economist Lawrence Yun. “Improving housing affordability is also contributing to the increase in sales.” Yun added that inventory levels are near a five-year high but remain below pre-COVID averages. “Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales. Home prices continue to rise in most parts of the country, further contributing to overall household wealth.” Regional Breakdown (Sales and Prices, September 2025)

Region
Sales (annual rate)
MoM Change
Median Price
YoY Change

Northeast
490k
+2.1%
$500,300
+4.1%

Midwest
940k
-2.1%
$320,800
+4.7%

South
1.86m
+1.6%
$364,500
+1.2%

West
770k
+5.5%
$619,100
+0.4%

As shown in this video clip, don’t ever underestimate your opponent, or competitor. There were plenty of opponents and competitors at this week’s MBA Annual, and today on Last Word at 1PM ET, Brian Vieaux, Kevin Peranio, and Courtney Thompson discuss highlights from the conference, how the ongoing government shutdown could affect borrowers’ ability to pay and broader market stability, and what “shutdown economics” means for lenders, policymakers, and the housing industry heading into year-end. Affordability, or lack thereof, has been a major topic for the last few years, what with rising insurance costs, HOA fees, rates in the 6’s, and increasing property taxes. FHFA Director Bill Pulte announced a review of loan-level price adjustments, which are created by looking at the historical performance of loans with certain attributes, to potentially reduce fees for homeowners and buyers. The review could impact conventional mortgage fees, offering relief amid past controversies over fee structures. Anything helps, right? (Today’s podcast can be found here and this week’s are sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process into a seamless end-to-end solution embedded with data-driven insights and intelligent automation. Hear an interview with Blue Sage Solutions’ Carmine Cacciavillani on modified workflows versus true artificial intelligence and how their partnership with Movement Mortgage is where the mortgage industry is headed.)

Home loan players are diverting technology budgets to cover back-office operations, after big spending in a downcycle, counter to historical patterns.

Contract closings increased 1.5% to an annual rate of 4.06 million in September, the highest in seven months, according to National Association of Realtors figures released Thursday.

While expectations that another federal rate cut is on the way next week, other economic trends may be having a larger influence on mortgage lending.

This is the second acquisition deal Old Republic has been involved in this year, after selling its title production business in January.

Decreased homeowner equity corresponds to recent declining prices reported by leading housing researchers, but tappable amounts still sit near record highs.

Mortgage rates were effectively unchanged on Thursday with the average lender very close to the best levels in over a year. But when it comes to the underlying bond market and the rates available to consumers, there are some dislocations that suggest risk is increasing. Specifically, bonds lost ground today. This normally implies higher mortgage rates. But the timing and magnitude of bond market losses can dictate the size of mortgage rate changes as well as the timing. In today’s case, bonds were in better shape this morning when mortgage lenders published their daily rate offerings.  There was additional bond market weakness as the day progressed, but not enough to trigger a mid-day rate change from lenders (mortgage lenders prefer to avoid mid-day changes unless bonds make bigger moves). Bottom line: instead of going into tomorrow with a cushion from the bond market, mortgage lenders will have to raise rates a bit in order to catch up.  NOTE: this assumes that bonds hold their exact same levels through tomorrow morning.  That’s certainly NOT a guarantee considering we’ll get the release of September’s CPI inflation data at 8:30am ET.  There’s no way to know how CPI will come in. Markets have already positioned for everything they think they know about the data.  In other words, there is a consensus expectation that monthly core CPI will be 0.3% and non-core (headline) CPI will be 0.4%. If the actual numbers are higher, rates would be more likely to rise tomorrow, but if they’re lower, bonds could bounce back enough that mortgage rates continue to hold steady, or actually improve. 

CPI Just as Risky as Usual–Perhaps More So

Bonds sold off on Thursday in a move that was as easy to chalk up to position-squaring ahead of CPI than anything else. The recent uptick in oil prices is also worth noting, but only if we remember that correlation is not always causality when it comes to that pairing. Given the absence of big ticket econ reports during the shutdown, Friday morning’s CPI is getting plenty of attention–more than it deserves, to be sure, and much more than it would outside a shutdown. That said, the data is just as “live” in terms of its potential to cause volatility.

Market Movement Recap

09:32 AM Slow, steady selling overnight and flat so far at weaker levels.  MBS down 3 ticks (.09) and 10yr up 3.3bps at 3.98

11:20 AM MBS down 6 ticks (.19) and 10yr up 4.8bps at 3.995

01:17 PM Flat at weaker levels.  MBS down 6 ticks (.19) and 10yr up 4.9bps at 3.996