Mortgage applications in the United States have dropped significantly in mid-March, with a sudden spike in interest rates chilling refinance activity, according to data from the Mortgage Bankers Association (MBA).
Mortgage applications fell 10.9% on a seasonally adjusted basis on the week ending 13 March.
This was likely triggered by increasing borrowing costs across the board, with 30-year fixed mortgages reaching their highest rate since December 2025.
The average mortgage rate jumped to 6.3% from 6.19% the previous week, according to MBA data.
MBA vice president and deputy chief economist Joel Kan attributed the rate jump to broader macroeconomic and geopolitical factors.
“Mortgage rates continued to move higher, driven by increasing Treasury yields as the conflict in the Middle East kept oil prices elevated, along with the risk of a broader inflationary shock,” Kan said.
Kan also said government refinances dropped, and that purchase applications remained steady.
“Government refinances also declined, but by 5%, as FHA rates have not increased quite as rapidly,” Kan said.
The MBA’s refinance index decreased 19% from the previous week while remaining 69% higher than the same week one year earlier.
The refinance share of mortgage activity fell to 52.3% of total applications, down from 57.8% the week before.
Conventional refinance applications were hit particularly hard, plummeting 27% over the week.
However, the market for home purchases lifted slightly, with the seasonally adjusted purchase index rising 1% from one week earlier.
On an unadjusted basis, refinances saw a 2% week-over-week gain and a 12% increase from the same week last year.
“Purchase applications remained steady despite the higher rates, with conventional purchase applications unchanged and growth in both FHA and VA segments,” Kan said.
“Overall purchase applications remained ahead of last year’s pace, continued to be supported by higher inventory and slowing home-price growth in many markets."
