Mortgage applications drop at steepest rate since 2023

Oct 19, 2026, 1:00 PM UTC

Residential mortgage applications have been falling at some of the steepest rates in years.

Applications for both new purchase and refinance loans have fallen year over year for 11 consecutive weeks, the longest streak since late 2023, around the time the Federal Reserve last hiked interest rates, according to a TRD Data analysis of data from the Mortgage Bankers Association.

Over the past month, these applications have fallen at rates not seen since 2023. For the week ending Sept. 18, mortgage applications plunged more than 41 percent year over year. As of the end of last week, applications were down more than 37 percent year over year. Applications have posted year-over-year declines this steep since spring of 2023, per TRD Data’s analysis.

The MBA anticipates that there will be a 5 percent drop in single-family mortgage originations, to about $2 trillion, in 2027.

Refinance applications are driving the declines, per MBA’s unadjusted data. As of the end of last week, for instance, refinance loan applications dropped just over 56 percent year over year, compared to new home purchase loan applications, which had dropped a little more than 16 percent compared to the same period last year.

The sliding mortgage applications follow the Federal Reserve’s move in mid-September to raise its benchmark federal funds rate range for the first time since July 2023. The Fed’s rationale for the increase was to help tame inflation.

However, the real estate industry, on both the commercial and residential sides, has pointed to climbing and elevated interest rates as the culprit behind slowed and stalled sales.

For residential mortgages, the average 30-year fixed-rate mortgage rate crossed the 7 percent threshold in late September, also for the first time since 2023.

Since then, home sales have plummeted nationwide. In September, there were roughly 315,700 pending home sales, down 8.6 percent year over year and 4 percent month over month, according to Redfin. Buyers canceled 14.5 percent of in-contract deals last month, up 1.2 percentage points year over year and one of the highest shares since the pandemic.