Mortgage rates fell to their lowest level in months in the week ended Aug. 29, but the decline was not enough to juice mortgage-application volume, which decreased 1.2% from the previous week, the Mortgage Bankers Association said, citing its Market Composite Index. 

The MBA’s Refinance Index showed increased activity, however, rising 1% week over week and 20% year over year, while the Purchase Index was down 6% on a weekly basis but up 17% on a yearly one. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.64% from 6.69%, while the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.31% from 6.35%. 

“Mortgage rates declined last week, with the 30-year fixed rate decreasing to its lowest level since April to 6.64%. However, that was not enough to spark more application activity,” MBA Deputy Chief Economist Joel Kan said.  

“Refinance applications saw a small increase from the previous week, driven by FHA and VA refinance applications, but conventional refinances declined,” Kan added. “The FHA rate is averaging about 30 basis points lower than the conventional rate in 2025, which has made those loans relatively more appealing to eligible borrowers. Purchase activity pulled back, after a four-week run of increases, as slower homebuying activity led to declines in applications across the various loan types.”