Mortgage application activity was little changed last week, with only a fractional decline in overall volume. The Mortgage Bankers Association’s weekly survey showed a 0.5% decrease in the seasonally adjusted Composite Index for the week ending August 22, 2025. “Mortgage rates inched higher for the second straight week, with the 30-year fixed-rate up to 6.69 percent. While this was not a significant increase, it was enough to cause a pullback in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications had their strongest week in over a month, up 2 percent, and the average loan size increased to its highest level in two months at $433,400.” The Refinance Index fell 4% from the previous week but remains 19% higher than the same week a year ago. The Purchase Index rose 2% on a seasonally adjusted basis and is running 25% ahead of last year’s level. The refinance share of total mortgage applications decreased to 45.3%. ARM share declined to 8.4%. FHA share held steady at 19.1%, while VA share slipped to 13.3%. Mortgage Rate Summary:
30yr Fixed: 6.69% (from 6.68%) | Points: 0.60 (unchanged)
15yr Fixed: 6.03% (from 5.96%) | Points: 0.77 (up from 0.70)
Jumbo 30yr: 6.67% (from 6.64%) | Points: 0.44 (down from 0.60)
FHA: 6.35% (from 6.39%) | Points: 0.80 (up from 0.66)
5/1 ARM: 5.94% (from 6.01%) | Points: 0.68 (up from 0.63)

The latest New Home Sales report showed little change in July, with sales holding very close to June’s pace. The seasonally-adjusted annual sales rate came in at 652,000. This marks a -0.6% dip from June’s revised 656,000, and leaves sales -8.2% lower than July 2024’s 710,000 level. For all practical purposes, the pace of sales continues to run sideways, reflecting the same stable range seen over the past 2+ years despite periodic swings. Regional Breakdown (Sales, July 2025)
South: -3.5% MoM
Midwest: -6.6% MoM
Northeast: unchanged MoM
West: +11.7% MoM
Market Inventory & Pricing
Homes for sale: 499,000 units (-0.6% from June; +7.3% YoY)
Months’ supply: 9.2 months (flat MoM; +16.5% YoY)
Median sales price: $403,800 (-0.8% MoM; -5.9% YoY)
Average sales price: $487,300 (-3.6% MoM; -5.0% YoY)
Big Picture Takeaway July’s new home sales data reinforces the recent pattern: demand is steady at best, but not accelerating. Inventory remains elevated, keeping months’ supply near multi-year highs. While prices have softened meaningfully versus last year (reflecting lower square footage more than actual price declines), elevated housing costs continue to limit the benefit to buyers.

It continues to be the case that day-to-day changes in average mortgage rates are very small. Today was no exception in that regard. Nonetheless, today represents a technical “record low” for 2025 with average rates edging just slightly lower than those seen on August 22nd and 26th. Our index (which tracks top tier, conventional 30yr fixed rates for ideal scenarios) is now 6.51%, the lowest it’s been since October 3rd 2024 when it was 6.26%. Virtually all of the recent improvement in rates followed the August 1st jobs report. Everything since August 4th has transpired in a relatively narrow range.  There was no new development that accounted for today’s improvement–just a random drift that happened to work out in our favor.

Legal experts say President Trump’s unprecedented move to fire Cook over alleged past misconduct will likely be hashed out in court, but there is little precedent to determine whether a sitting board governor can be removed for past actions.

The bank “temporarily” paused home equity line of credit lending in April 2020, over concerns regarding the economic impact of the Covid-19 pandemic.

The new affiliate, NAF Insurance Services, is teaming up with The Baldwin Group to offer a range of coverage from more than 50 carriers nationwide.

The judge sided with Massachusetts officials in a review of their lawsuit against Hometap, who pushed back on descriptions of its products as “illegal” loans.

A proposed rule published Tuesday in the Federal Register would limit the Consumer Financial Protection Bureau’s ability to designate nonbank entities for supervision.

Mortgage rates tend to move at least a little every day although they haven’t been moving too much in the bigger picture recently. The only truly memorable move int he past few months occurred after the August 1st jobs report. It resulted in a 2-day drop from 6.75% to 6.57%.  The next closest contender was last Friday’s reaction to Fed Chair Powell’s Jackson Hole speech which took the index from 6.62 to 6.52.  So far this week, we’ve been holding very close to those levels.  Yesterday saw a modest bump and today pushed rates back down to Friday’s levels. The end. This week’s movements could be classified as incidental, random drift.  Such a trend is a logical interlude separating the news and events that actually matter to the big picture rate trend. Barring a major, unexpected development, the next high-consequence event is the jobs report due out next Friday. It would be no surprise to see a fairly drifty trend prevail until then.

Modest, Incidental Victory

Bonds closed with MBS in line with their best levels of the day, up an eighth of a point. 10yr yields fell just under 1bp to 4.264. 2yr yields did better, shedding just over 4bps and extending their gap vs 10yr yields to the widest levels since the volatile days in early April. The AM news cycle credited the news of Trump firing the Fed’s Lisa Cook for this “steepening” (a steeper slope between 2 and 10yr yields). Indeed, it may have contributed, but it’s debatable whether this level of movement in the curve actually matters.  2s vs 10s have been holding a tight range since April with few days falling outside a range of 0.45 to 0.57. In the bigger picture, bonds are still counting the hours until next Friday’s jobs report. 

Econ Data / Events

Durable Goods

-2.8 vs -4.0 f’cast, -9.3 prev

Core Durable Goods

1.1 vs 0.2 f’cast, -0.7 prev

CaseShiller 20 mm nsa (Jun)

0.0% vs — f’cast, 0.4% prev

FHFA Home Price Index m/m (Jun)

-0.2% vs 0% f’cast, -0.2% prev

FHFA Home Prices y/y (Jun)

2.6% vs — f’cast, 2.8% prev

Market Movement Recap

08:37 AM roughly unchanged overnight and mostly holding in early trading. MBS up 1 tick (.03) and 10yr up less than 1bp at 4.278

01:19 PM Strong 2yr auction but bonds were already gaining ground before that.  10yr now down 1.3bps at 4.259.  MBS up 3 ticks (.09)

05:23 PM Bonds closed with MBS in line with their best levels, up an eighth of a point.  10yr yields fell just under 1bp to 4.264.