Mortgage refinancing activity in the U.S. plummeted last week as interest rates reached their highest level in nine months, according to new industry data. The Mortgage Bankers Association (MBA) reported an 18% drop in refinancing applications for the week ending May 22, though they remain 19% higher than the same period a year ago. The average contract interest rate for 30-year fixed-rate mortgages rose to 6.65%, up from 6.56% the previous week, marking a 30-basis-point increase over the past five weeks—the highest since August 2025.
Refinancing applications accounted for 38% of total mortgage applications, the lowest share since June 2025. Conventional refinances fell 14%, FHA applications dropped 18%, and VA applications declined 34%. Meanwhile, mortgage applications for home purchases decreased 0.4% week-over-week and were just 5% higher than the same week a year ago. The average loan size for purchase applications hit a survey high of $473,600, as higher rates reduced purchasing power for borrowers with smaller loan sizes.
Mortgage rates saw a slight dip at the start of this week, according to Mortgage News Daily, offering some relief to potential borrowers.