Mortgage applications rose 9.4% on a week-over-week basis for the week ending July 4, 2025, as interest rates continued to ease across June. According to the Mortgage Bankers Association, the trend reflects increasing momentum in the housing market despite mixed signals from purchase activity. The Refinance Index climbed 9% from the previous week, marking a 56% jump compared to the same period last year.
Refinancing Grows, Purchases Show Mixed Trends
While refinancing drove most of the gain in mortgage applications rise, purchase activity showed more complexity. The unadjusted Purchase Index fell 13% compared to the prior week. However, after adjusting for seasonal factors, purchase applications reached their highest level since February 2023. The index was also 25% higher than the same week last year, pointing to stronger underlying demand as buyers adapt to shifting market conditions.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, said in a statement that recent growth in housing inventory and slowing home prices are contributing to improved affordability. “With more options and slightly lower rates, prospective buyers are finding better opportunities to enter the market,” Kan said.
Rates and Loan Sizes Continue Decline
Average loan sizes have declined alongside rates. The average loan size dipped to $432,600, the lowest level since January. Meanwhile, the average contract interest rate for 30-year fixed-rate conforming loans fell to 6.77%, a three-month low. The drop in rates has been a significant factor driving increased refinancing.
The MBA noted that overall application volume could see further gains if rates continue to ease. The recent uptick in purchase applications suggests that some buyers who had paused their searches earlier this year are returning to the market.
Market Outlook Remains Cautiously Optimistic
Housing inventory has gradually increased as more sellers list homes for the summer season. At the same time, the rate of home price growth has slowed compared to last year’s rapid gains. This combination may help support demand heading into the second half of 2025.
The Mid Valley region has seen similar trends, with agents reporting more listings and fewer bidding wars compared to 2024. While affordability remains a challenge for many first-time buyers, the recent pullback in rates has created new possibilities for some households who were previously priced out.
Mortgage applications rise has been a key metric watched closely by economists and real estate professionals. Analysts expect continued volatility as markets react to Federal Reserve policy signals and broader economic indicators.
Buyers and homeowners considering refinancing are encouraged to consult with local lenders to evaluate options, as rate changes can move quickly. For current mortgage rates and further details, visit the Mortgage Bankers Association at www.mba.org.
Closing Community Relevance
Local real estate professionals say the latest figures could signal a more active summer market in cities like El Monte, Baldwin Park and Rosemead. As rates remain near recent lows and more homes come to market, buyers may find fresh opportunities in the weeks ahead.
