Following three consecutive weeks of growth, mortgage loan application volume declined by 10% on a seasonally adjusted basis for the week ending July 11, 2025.¹ While this shift may reflect a moment of caution among buyers, it follows a period of steady momentum and highlights how sensitive the market remains to changes in interest rates and economic signals.

“The shift in demand could be attributed to several factors,” said Brett Hively, Senior Vice President and Mortgage Capital Markets and Financial Strategist at Ameris Bank. “Early in the week of July 11, the 10-year Treasury yield moved higher, and mortgage rates for both 30-year conforming loans and FHA loans followed suit. Homebuyers and real estate investors concerned about fluctuating rates and affordability may have decided to pause their purchases.” ²

Refinance share rises, but volume declines.

Although the refinance share of total mortgage applications rose to 41.1%—up from 40.0% the previous week—the actual volume of refinance applications decreased by 7%.³ This shift reflects a sharper drop in purchase activity rather than increased interest in refinancing.

“This suggests that while refinancing remains a consideration for some homeowners, rising rates may be discouraging new refinance activity,” Hively said.

Potential scenario of elevated interest rates.

As interest rates rise, borrowing costs naturally increase, which can influence how buyers and sellers approach the market. Rather than discouraging activity, this environment may simply shift the way participants engage. 

“In a higher-rate environment, we often see buyers becoming more selective and sellers adjusting their strategies,” Hively said. “This can lead to more thoughtful negotiations and creative solutions, such as pricing adjustments or seller incentives, to help deals come together.”

Upcoming FOMC meeting.

The upcoming Federal Open Market Committee (FOMC) meeting is scheduled for July 29-30, 2025.⁴ As the date approaches, market watchers will be closely monitoring whether the Federal Reserve decides to raise, lower, or maintain the current Federal Funds rate. While the Federal Funds rate does not directly set mortgage rates, it influences broader financial conditions and investor sentiment, indirectly influencing mortgage rates.


Sources:
^{1, 3} https://www.mba.org/news-and-research/newsroom/news/2025/07/16/mortgage-applications-decrease-in-latest-mba-weekly-survey
² https://www2.optimalblue.com/obmmi
⁴ https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.