Buyers responded enthusiastically to last week’s drop in mortgage rates, but this week’s spike in interest rates and the Iran conflict could lead to a decline in mortgage applications in the coming weeks.
Mortgage applications were at their strongest for the month in the last week of February as buyers took advantage of mortgage rates that fell below 6%.
According to the Mortgage Bankers Association, the number of mortgage applications for the week ending February 27, 2026, increased 11% from the previous week.
The market composite index, which measures the number of mortgage applications, rose 11% from the previous week on a seasonally adjusted basis and 12% on an unadjusted basis from the previous week.
Meanwhile, the refinance index rose 14.3% from the previous week. It also increased by 109% compared to the same period in 2024.
The unadjusted purchasing index rose 8.9% from the previous week and 10% from the same week in 2024.
Joel Kang
“Mortgage applications increased last week on continued strong refinance activity as mortgage rates hovered near their lowest levels since 2022,” MBA Vice President and Deputy Chief Economist Joel Kang said in the firm’s report.
“The number of refinance applications increased for the fourth consecutive week, the strongest pace since 2022, and conventional refinances increased by 20%. The increase in the average loan size for refinances indicates that borrowers with larger loan sizes are looking to reduce their monthly payments.Purchase applications also increased, with this week’s pace almost 10% above last year’s pace, as lower interest rates and rising levels of housing inventory continue to support homebuyer interest.”
As of early last week, 30-year fixed-rate mortgage rates were below 6%, matching the lowest level since 2022.
But this week, interest rates quickly reversed following last weekend’s news that the US had launched an attack on Iran, plunging the economy into uncertainty. As of Tuesday, 30-year fixed-rate mortgage rates remained at about 6.13%, according to Mortgage News Daily.
The number of mortgage applications gradually improved each week throughout February, according to the MBA’s weekly report. But skyrocketing interest rates and global uncertainty have a history of spooking buyers, and applications could fall in the coming weeks.
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