The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending May 8, 2026, showing total application volume increased 1.7% on a seasonally adjusted basis from the prior week. The rebound comes after two consecutive weeks of declines and signals that buyers are pressing forward despite persistently elevated mortgage rates.
Key Survey Results
- Market Composite Index (total volume): +1.7% week-over-week (seasonally adjusted); +2% unadjusted
- Purchase Index: +4% week-over-week (seasonally adjusted); +7% above the same week one year ago
- Refinance Index: -1% week-over-week; +28% above the same week one year ago
- Refinance share of applications: 40.8% (down from 42.0% the prior week)
- ARM share: 8.8% of total applications
- FHA share: 17.9% of total applications
- VA share: 14.9% of total applications
Average Contract Interest Rates (Week Ending May 8)
- 30-year fixed (conforming): 6.46% -- its highest level in five weeks
- 30-year fixed (jumbo): 6.48%
- 30-year fixed (FHA-backed): 6.16%
- 15-year fixed: 5.83%
- 5/1 ARM: 5.70%
What MBA's Economists Said
Joel Kan, MBA's Vice President and Deputy Chief Economist, noted that mortgage rates were generally higher last week, with the 30-year fixed reaching its highest level in five weeks at 6.46%. Despite that, buyers returned to the market -- purchase applications rose 4% and are running 7% ahead of last year's pace across all loan types. Kan noted that potential homebuyers appear to be adjusting to the current rate environment rather than waiting for lower rates, which is consistent with improving year-over-year purchase volumes.
The Significant Positive: Purchase Volume Up 7% Year-Over-Year
The most encouraging data point in this week's survey is the 7% year-over-year improvement in purchase applications. Year-over-year comparisons strip out seasonal effects and provide a cleaner signal about underlying demand trends than week-to-week changes. A 7% increase versus the same week in 2025 -- when mortgage rates were approximately 6.6-6.8% -- suggests that demand is genuinely improving as rates have moderated by roughly 20-40 basis points on a year-over-year basis.
This year-over-year strength is also consistent with demographic demand dynamics. Millennials, the largest living generation, are in their primary home-buying years (ages 25-44). While elevated rates have compressed the number of eligible buyers at any given price point, the underlying demand for homeownership from this cohort is structural and persistent.
Refinance Applications: 28% Above Year-Ago Levels
Refinance volume fell 1% week-over-week but remains 28% above the same week in 2025. This year-over-year strength reflects the accumulated pool of borrowers who purchased at the 2023 peak rates of 7.5-8% and are now able to refinance at meaningfully lower rates. Even at 6.46%, a refinance from 7.75% or 8% can save $200-400/month on a $350,000 loan -- more than enough to justify the closing costs for most borrowers planning to stay in their homes.
The weekly 1% decline in refinance applications despite a year-over-year surplus suggests that the most rate-sensitive refinance candidates -- those with the largest rate advantage -- have largely already acted. The remaining refinance-eligible population is more rate-sensitive at the margin, meaning each small rate increase disproportionately reduces their incentive to refinance.
Understanding the FHA Rate Advantage
One detail worth highlighting in this week's rate data: the FHA-backed 30-year fixed rate was 6.16%, compared to 6.46% for conventional conforming loans -- a 30-basis-point advantage for FHA borrowers. This spread is relatively typical and reflects the implicit government guarantee on FHA loans, which reduces lender risk and allows lower pricing.
For borrowers with credit scores below 740 or down payments below 10%, the FHA rate advantage can more than offset the additional cost of FHA mortgage insurance premiums (MIP). FHA annual MIP runs approximately 0.55% for loans with less than 10% down -- so the net cost comparison between FHA and conventional depends on both the rate differential and the PMI/MIP cost differential, which varies by credit score and loan-to-value ratio. Our mortgage calculator can model both structures to help you compare.
The ARM Spread: Understanding the 5/1 ARM at 5.70%
The 5/1 ARM averaged 5.70% for the week -- a 76-basis-point advantage over the 30-year fixed conforming rate. On a $400,000 loan, that spread translates to approximately $185/month in lower initial payments. Over the initial five-year fixed period, the total payment savings would be approximately $11,100.
The risk: at first adjustment (typically five years in), the 5/1 ARM rate adjusts to a benchmark index (typically SOFR) plus a margin, subject to periodic and lifetime caps. If rates rise modestly over the next five years, the first adjustment could push the rate to 7-8% -- eliminating the original savings and then some. If rates fall, the ARM borrower benefits. The appropriate choice depends on your certainty about your five-year housing timeline and your risk tolerance for payment uncertainty.
What the Government Loan Shares Tell Us
FHA at 17.9% and VA at 14.9% together represent approximately 33% of purchase applications. Government loan programs -- FHA, VA, and USDA -- collectively enable buyers who might not qualify for or afford conventional financing. The stability of these shares through multiple weeks of rate volatility suggests that lower-income, lower-down-payment, and veteran buyers are continuing to participate in the purchase market at consistent rates.
This is an important structural support for housing demand. Government loan programs have effectively maintained access to mortgage credit for a significant portion of would-be buyers who might otherwise be priced out by conventional qualification standards.
What This Week's Data Means for the Housing Market
The week ending May 8 shows a housing market that is adapting rather than retreating. Despite a five-week high in mortgage rates, purchase applications rose 4% week-over-week and 7% year-over-year. This is not a booming market -- it is a market that has found a floor at current rate levels and is generating consistent, if modest, demand.
The subsequent weeks' data (which showed declines as rates climbed to 6.56% and then 6.65%) suggest that 6.46% may have been near the upper limit of borrower tolerance at the time. But the underlying demand signals -- particularly the year-over-year strength -- remain positive.
Frequently Asked Questions
How can purchase applications rise when rates are increasing?
The two data points are not contradictory. Rates increased within a range that many buyers can absorb. The buyers who are active in the market -- those who need to move for life reasons or who have been waiting a long time -- are not indefinitely deterred by a 10-20 basis point rate increase. Rate sensitivity becomes more acute when rates move dramatically (e.g., 50+ basis points in a short period) or when they cross a psychological threshold like 7%.
What does it mean that purchase applications are 7% above year-ago levels?
It means more buyers are applying for purchase mortgages than at the same point last year. This likely reflects modestly lower rates versus 2025 levels and improving buyer confidence. Year-over-year comparisons are more meaningful than week-to-week changes because they remove seasonal patterns from the data.
Is the FHA rate always lower than the conventional rate?
The rate on an FHA loan is typically lower than a conventional loan because FHA's government guarantee reduces lender risk. However, FHA loans require mortgage insurance premiums (MIP) for the life of the loan in most cases, which adds to the monthly cost. The total cost comparison between FHA and conventional depends on the rate differential and the MIP versus PMI cost, and varies by credit score, loan size, and down payment amount.
What happens to my ARM rate at first adjustment?
At first adjustment (typically five years in on a 5/1 ARM), your rate changes to a benchmark index rate (usually SOFR) plus your loan's margin (typically 2.5-3%). The adjustment is then subject to periodic caps (usually 2% per adjustment) and a lifetime cap (typically 5-6% above the initial rate). If your initial rate was 5.70% with a 5% lifetime cap, the maximum rate after all adjustments would be 10.70% -- though practical economic constraints make such extremes unlikely over normal loan periods.
How often does the MBA release the weekly survey?
The MBA releases the Weekly Mortgage Applications Survey every Wednesday morning, covering the week ending the previous Friday. The survey has been published continuously since 1990 and covers more than 75% of all retail residential mortgage applications in the United States, making it the most comprehensive weekly measure of mortgage demand available.
Source: Mortgage Bankers Association, Weekly Mortgage Applications Survey, May 13, 2026.