US mortgage rates have decreased to 6.84% for 30-year fixed-rate mortgages with conforming loan balances $806,500 or less, according to the Mortgage Bankers Association. The drop is attributed to financial market volatility caused by geopolitical conflict and ongoing tariff uncertainties.
Mortgage applications for home purchases fell 3% last week compared to the previous week, despite the lower interest rate. However, refinancing applications decreased only 2%. Refinance activity declined across conventional and government borrowers, except for VA loans which saw a 25% increase in purchase applications and a slight increase in refinance applications.
The average loan size has dropped to $380,200, the lowest since January 2025. The Federal Reserve’s announcement on interest rates today is expected to have an impact, although it is unlikely to trigger a rate cut.
Financial market experts point to the Fed’s economic projection materials, specifically the dot plot, as carrying significant weight in determining future interest rate movements. With no imminent change in rate cuts, investors will likely focus on the Fed’s projections and economic data released during today’s announcement.
Source: https://www.cnbc.com/2025/06/18/mortgage-demand-drops-even-as-interest-rates-decline.html