Mortgage & housing market update
Refinance Demand Drops as Borrowers Revisit ARM Options
Mortgage applications declined during the week ending September 4 as a sharp drop in refinancing outweighed nearly flat purchase demand, while adjustable-rate mortgage usage increased.
Total mortgage application volume fell 2.7% on a seasonally adjusted basis. Purchase applications were nearly unchanged for the week and remained above their year-earlier level, while the refinance index dropped 6% and reached its slowest weekly pace since May 2025. The survey period preceded the latest sharp move higher in rates.
Adjustable-rate mortgages accounted for 8.5% of applications, the highest share since June, as the reported average contract rate for a 5/1 ARM declined while the 30-year fixed survey average increased. These national survey figures include points and are not personalized rate quotes.
Homeowners considering a refinance should compare the break-even period, closing costs and expected time in the loan—not only the advertised rate. Buyers comparing fixed and adjustable options should also review adjustment caps, the initial fixed period and their ability to handle a future payment increase.
Mortgage-rate information is provided for education only and is not a rate quote, offer, or commitment to lend. Actual rates, fees and terms vary by borrower, property, loan program, market conditions and lock period. Home-price indexes are not appraisals or forecasts for a specific property.
Source reporting: Housing Brief Housing News. This market update is an original summary and commentary prepared by the Carson Home Team.