Real Estate

Mortgage Rates Dip to 7.41% but Applications Fall 5.3%: MBA

The MBA said the 30-year fixed rate fell to 7.41% in the week to Oct. 16, 2026, but applications fell 5.3%; NAR said pending sales fell 7.3%.

Oct 21, 2026 - 12:24

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U.S. mortgage rates declined for the first time in more than two months last week, but applications for home loans still fell, according to the Mortgage Bankers Association's weekly survey released on Wednesday, October 21, 2026. The report followed data a day earlier showing a sharp September drop in contract signings for existing homes.

Rates edge lower

The average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance of $832,750 or less fell to 7.41% in the week ending October 16, from 7.50% the prior week, the MBA said. Points, including the origination fee, fell to 0.75 from 0.83 for loans with an 80% loan-to-value ratio.

Other loan types showed similar declines, according to the MBA:

30-year fixed jumbo loans (above $832,750): 7.33%, down from 7.49%
30-year fixed loans backed by the FHA: 7.13%, down from 7.19%
15-year fixed: 6.73%, down from 6.87%
5/1 adjustable-rate mortgages: 6.46%, down from 6.54%

Demand keeps sliding

The MBA's Market Composite Index, which measures loan application volume, decreased 5.3% on a seasonally adjusted basis from a week earlier. The seasonally adjusted Purchase Index fell 7%, and unadjusted purchase activity was 18% lower than in the same week a year ago. The Refinance Index declined 2% for the week and was 59% below its year-earlier level.

"Mortgage rates decreased for the first time in over two months, with the 30-year fixed rate dropping to 7.41 percent. However, lower rates were not enough to boost application activity, as both purchase and refinance applications continued to decline," said Joel Kan, the MBA's vice president and deputy chief economist. Kan added that the higher-rate environment "has cooled the housing market this fall."

CNBC reported that rates are now more than a full percentage point higher than a year ago, which leaves a very small pool of borrowers who would benefit from refinancing.

Shifts in loan mix

The refinance share of activity rose to 39.0% of total applications from 37.7%, while the adjustable-rate mortgage share held at 10.5%, the MBA said. Kan noted that ARM rates remained almost a full percentage point below the 30-year fixed rate. The FHA share of applications slipped to 16.3% from 16.4%, and the VA share fell to 11.5% from 11.9%.

Pending sales fall in every region

On Tuesday, October 20, the National Association of Realtors reported that pending home sales fell 7.3% in September from August and 11.3% from a year earlier. Pending sales, which track signed contracts that have not yet closed, declined month over month in all four U.S. regions:

West: down 9.2% month over month, down 15.0% year over year
South: down 8.2% month over month, down 12.0% year over year
Midwest: down 6.5% month over month, down 8.7% year over year
Northeast: down 4.2% month over month, down 9.4% year over year

"Market conditions weakened in September due to fast-rising mortgage rates," NAR Chief Economist Lawrence Yun said in the release. Yun also said that a limited number of distressed properties is supporting steady home prices. Citing Realtor.com data, NAR said Nashville had the smallest annual decline in pending sales among the 50 largest metro areas, at 2.0%.

Rates and the broader backdrop

Mortgage rates have tracked broader bond-market moves. The yield on the 10-year U.S. Treasury, a key benchmark for mortgage pricing, was around 5.111% on Wednesday morning, CNBC reported, ahead of the Federal Reserve's next policy meeting on October 28.