Let me walk you through what's happening in the mortgage market right now, based on the latest numbers from the Mortgage Bankers Association. According to their weekly survey, mortgage applications slipped just under half a percent compared to the previous week, which isn't dramatic but does tell us something about what buyers and sellers are dealing with. Purchase applications fell about two percent from the week before, and year over year we're down three percent, meaning fewer people are actually putting in applications to buy homes than we saw a year ago.
The interesting part is that refinancing activity actually picked up a bit, now representing just under forty-two percent of all mortgage applications. However, the people doing refinances are getting smaller in terms of the loans they're using. The average refinance loan size dropped to its lowest point since mid-2025, which tells me that only certain borrowers with smaller mortgages feel like it makes sense to refinance at these rates. The folks with bigger loans are sitting tight because it doesn't make financial sense for them to refinance when rates are holding where they are.
Mortgage rates themselves haven't moved much. The conventional thirty-year fixed rate stayed flat at 6.77 percent, while some jumbo rates actually inched up slightly. These are important numbers because they show that the rate environment isn't changing enough to spark new activity. According to the MBA's economist, purchase applicants are increasingly worried about affordability as these higher rates continue to impact the monthly payments they would have to make on a home purchase.
A broader sentiment measure called the Mortgage Intent Index, which tracks credit-pull activity, did show a small improvement week over week, but the index is still running about ten percent below where it was at this same time last year. What this tells me is that despite small improvements here and there, borrower interest in the mortgage market remains pretty muted across the board. Without a meaningful shift in rates, mortgage activity is expected to stay subdued heading into the Labor Day season.
What I am seeing locally in the Bay Area and East Bay reflects these national trends pretty clearly. Buyers are definitely holding back because the math on affordability just doesn't work for them at current rates, and sellers are starting to feel that restraint in their market opportunities. This is a moment where both sides need to be realistic about pricing and what the actual market conditions support, because applications being down and refinance activity being this weak tells me we're in a patience period where good counsel matters more than aggressive moves.
