No Surprise: Refi Demand Sapped by Rate Spike

Mortgage application activity declined for the second consecutive week as rising interest rates continued to weigh on demand. The Mortgage Bankers Association (MBA) reported a decrease of 10.5% on a seasonally adjusted basis for the week ending March 20. Both major components moved lower. The Refinance Index fell 15% from the previous week, though it remained 52% higher than the same week one year ago.  Purchase activity also softened, with the seasonally adjusted Purchase Index declining 5% and running 5% above year-ago levels. According to MBA’s Joel Kan, persistently elevated Treasury yields—driven in part by higher oil prices and inflation concerns—pushed mortgage rates higher across the board. The average 30-year fixed rate climbed to its highest level since October 2025, further eroding refinance incentives and dampening purchase demand. The composition of activity shifted further away from refinances. The refinance share of total applications decreased to 49.6% from 52.3% the prior week, while ARM share increased slightly to 8.1% . FHA share rose to 19.7% , VA share declined to 15.9% , and USDA share edged up to 0.5% . Mortgage Rate Summary: 30yr Fixed: 6.43% (from 6.30%) | Points: 0.65 (from 0.63) 15yr Fixed: 5.83% (from 5.66%) | Points: 0.80 (from 0.73) Jumbo 30yr: 6.45% (from 6.39%) | Points: 0.56 (from 0.34) FHA: 6.15% (from 6.08%) | Points: 0.75 (from 0.70) 5/1 ARM: 5.75% (from 5.65%) | Points: 0.68 (from 0.67)