Insights 
VT 
Mortgage applications in the US saw a rise of 1.1% for the week ending May 9, 2025. This increase follows a prior week’s 11.0% increase, as outlined by the Mortgage Bankers Association.
Key figures show the market index rose to 251.2 from 248.4. The purchase index increased to 166.5 from 162.8, while the refinance index decreased slightly to 718.1 from 721.0. Additionally, the 30-year mortgage rate went up to 6.86% from 6.84%.
Influence Of Rising Rates
The growth in applications was mainly due to a rise in purchase activity, even though refinancing experienced a small decline. How rising rates will affect future applications remains uncertain, as it might lead to more distinct trends in the mortgage market.
The prior data paints a fairly plain picture: demand for home purchases edged up again, adding to the jump we saw earlier. A smaller contribution came from refinancing, which slipped a little this time around. Despite the 30-year mortgage rate ticking slightly higher—6.86%, up from 6.84%—buyers appeared unfazed. At least for now.
The overall market index moved up modestly, holding onto the momentum of the previous week’s double-digit climb. That said, the nature of these consecutive rises may be less about a general increase in lending optimism and more about timing—especially if borrowers are attempting to get ahead of any further increases in rates. We’ve seen before how short spikes in applications can result from a sudden sense of urgency rather than a fundamental shift.
Kan, as cited, pointed toward the comparative strength in purchase activity, which rose solidly for the second week running. This is telling. While refinancing continues to fall out of favour, likely due to the relatively higher rate environment, new borrowing still has some legs. If markets begin to price in prolonged tightness in rate policy, we might see borrowers hurrying to lock in terms sooner rather than later. That would not be a long-lasting effect, but it may drive percentage gains in the short term.
Mortgage Market Sentiment
So what can be understood here? Mortgage activity offers us a window into consumer sentiment around longer-term borrowing. A roughly flat move in refinancing, paired with a moderate push in home purchases, tells us fewer people are reacting to changes in yield once they’ve already held debt for some time. But new entrants—home buyers—are still prepared to act in what they see as acceptable conditions. The persistence of those views is what we’ll be watching.
It’s also worth noting that the increase in the average 30-year fixed mortgage rate, though small, is not meaningless. The cost of borrowing is not dropping—and that’s a critical data point. When paired with steady inflation numbers and hawkish central bank language, the tone of forward-looking rate stability appears limited. This tempers any reason to expect a sharp comeback in refinancing any time soon.
In the coming weeks, if similar week-on-week moves occur, our balance of focus stays pinned to directionality across indices rather than magnitude alone. Index moves like the ones from 248.4 to 251.2 might not sound like much, but they illustrate short-term behaviour—not longer-term lending sentiment. Rise and fall patterns in the purchase and refinance components matter more.
There’s also the matter of base effect. The large 11% lift previously means that even a small gain now may simply reflect timing distortions—seasonal borrowing habits or delayed filings. We don’t act on numbers without digging deeper into why they’ve moved.
Some participants will inevitably follow the headline percentages alone, overlooking the slower grind in long-term sentiment. But trends aren’t hidden—they’re just slightly behind the veil of week-on-week excitement. That veil, for a while at least, likely stays in place.
