US mortgage rates fell for the first time in six weeks, dropping 7 basis points to 7.02%, according to the Mortgage Bankers Association’s latest weekly report.
This modest decline supported home-purchase activity, keeping purchase applications at their highest level in a year. The MBA’s purchase index rose 0.6% for the period, reflecting steady buyer interest even as rates remain elevated by historical standards.
The rate drop largely followed a retreat in Treasury yields after recent inflation data suggested easing price pressures, which in turn firmed up market expectations for earlier cuts to the Federal Reserve’s policy rate. Markets also appeared to respond favorably to signals from the executive branch regarding a cautious, measured rollout of new tariffs, a factor that helped calm investor sentiment in the opening days of the administration.
Despite the improvement in purchase applications, refinancing activity moved in the opposite direction, declining 2.9% during the same week. The MBA’s weekly survey — which covers more than 75% of US residential mortgage applications and has tracked industry trends since 1990 — highlights the bifurcated mortgage market: purchase demand showing resilience while refinance volumes remain sensitive to rate levels and borrower incentives.
Overall, the data suggest that while consumers continue to pursue home purchases amid slightly lower borrowing costs, refinancing remains subdued until a clearer and more sustained drop in rates materializes. Lenders and borrowers will be watching upcoming inflation readings and central bank communications closely for signals that could further influence mortgage pricing and borrower behavior.
