Mortgage rates fall for a third week, yet purchase applications drop 2% and sit 19% below last year

Home-loan rates have now fallen three weeks in a row, and it has not helped demand. In the week ending Oct. 30, the Mortgage Bankers Association's seasonally adjusted Purchase Index fell 2% from the week before and was 19% below the same week a year ago, according to the MBA data as reported by Realtor.com. The overall Market Composite Index, which includes refinancing, slipped 1.2%. Bloomberg, Quartz and Traders Union ran the same direction in their headlines this morning: rates down for a third week, demand still down.

The rate fell. The year-over-year gap is the story.

The MBA put the average contract rate on a 30-year fixed conforming loan at 7.30%, down from 7.37% a week earlier and 6.17% a year ago. Freddie Mac's separate survey shows the same slope: 7.40% on Oct. 8 and Oct. 15, 7.32% on Oct. 22 and 7.24% on Oct. 29.

Here is what that means on a $400,000 loan (principal and interest only, our calculation):

The latest drop saves a borrower about $19 a month. Compared with a year ago, the same loan costs about $300 a month more, roughly $3,600 a year. Three weeks of easing have not closed that gap, and that is why buyers are still waiting. For context on how we got here, see our October 21 look at the applications report.

Refinancing is flat at a very low level

The refinance index rose 0.1% on the week but is 60% lower than a year ago, and refinancing's share of all applications edged up to 39.8% from 38.9%. MBA chief economist Mike Fratantoni, quoted by Realtor.com, said activity "is still quite slow," with purchase volume down and refinance volume "effectively flat at a very low level." Most homeowners hold a loan well under today's rate, so a quarter-point move changes nothing for them.

Adjustable-rate loans keep gaining

The ARM share of applications rose to 11.4% from 11.3%, which Fratantoni said is the highest since September 2025. ARM rates are almost a full percentage point below the 30-year fixed rate, the report says, which is the draw. The trade-off is that the payment can reset higher later. Our earlier piece on what an ARM reset does to a payment works through that math. Government-backed loans moved a little: FHA share fell to 16% from 16.6%, VA rose to 11.2% from 11%, and USDA rose to 0.6% from 0.5%.

Who feels a 19% drop in purchase applications

Purchase applications are the earliest hard count of future closings, so they run ahead of the businesses that live off a sale. Fewer contracts in October means fewer closings in November and December, and fewer move-ins after that.

• Movers. Our CheckThisBiz data lists 42,966 independent moving companies. Their busiest weeks follow closings.
• Roofers and landscapers. Many get work from new owners and from sellers fixing up a house before listing: 34,694 independent roofing and 44,163 landscaping businesses are on file. See our roofing playbook.
• A buyer with a closing this month. The $19 a month from the past week matters less than the lock terms. Ask whether the lock allows a one-time float-down if rates fall further.

What decides the next move

Rates drifted down after the Fed held at its October meeting, Fratantoni said. Realtor.com cites CME Group's FedWatch at just under 80% for another hike at the December meeting. If that hike comes, mortgage rates are unlikely to keep falling. Friday's jobs report is the next data point that can move that number. The 10-year Treasury yield, which mortgage pricing tracks, stood at 4.92% on Yahoo Finance data on Nov. 4; watch it on our 10-year yield chart.

Sources: Mortgage Bankers Association survey for the week ending Oct. 30, 2026, as reported by Realtor.com News; Freddie Mac Primary Mortgage Market Survey history; Yahoo Finance market data; CheckThisBiz independent business counts. MBA's own release was not opened for this article, so MBA figures are as Realtor.com reported them. Payment figures are our calculations on a $400,000, 30-year fixed loan, principal and interest only, and exclude taxes, insurance and fees. This is market information, not investment advice.