Mortgage applications rise 0.8% as ARM share hits 8%
Mortgage applications increased 0.8% for the week ending August 28, 2026. Purchase activity rose 2%, and adjustable-rate mortgages hit a five-week high.
Mortgage applications increased by 0.8% for the week ending August 28, 2026, according to the Mortgage Bankers Association. The average contract rate for a 30-year conforming fixed mortgage rose to 6.79%.
Mike Fratantoni, the MBA's chief economist, said mortgage rates had reached a four-week high. He linked the increase to investor worries about inflation and government deficits.
Purchase and refinance trends
The seasonally adjusted purchase index rose by 2% from the previous week. On an unadjusted basis, it was 0.3% lower than the prior week and 0.2% below the level from the same week a year ago.
Refinance activity moved in the opposite direction. The refinance index fell by 1% week-over-week and was 19% lower than the same week last year. The refinance share of total mortgage applications dipped to 41.8% from 42.0%.
Fratantoni noted that purchase volume increased modestly despite the rate environment. "In many local markets, potential buyers have plenty of homes to choose, and this is likely supporting transaction volume," he said.
Adjustable-rate mortgages gain favor
A notable shift was the rising popularity of adjustable-rate mortgages, or ARMs. Their share of total applications climbed to 8% last week. This marks the highest level for ARM share in five weeks.
Fratantoni identified this as a key trend the association is monitoring. More borrowers are choosing ARMs as fixed rates remain raise.
Loan type and interest rate breakdown
Applications for different government-backed loans showed mixed results. The share for Federal Housing Administration (FHA) loans decreased to 15.9%. The share for Veterans Affairs (VA) loans increased to 13.6%. The U.S. Department of Agriculture (USDA) share held steady at 0.5%.
Interest rates moved higher for most loan products. The table below shows the average contract rates for the week.
| Loan Type | Average Rate (Previous Week) | Average Rate (Current Week) |
|---|---|---|
| 30-Year Fixed Conforming | 6.78% | 6.79% |
| 30-Year Fixed Jumbo | 6.73% | 6.76% |
| 30-Year Fixed FHA-backed | 6.46% | 6.49% |
| 15-Year Fixed | 6.10% | 6.14% |
| 5/1 ARM | 5.98% | 5.94% |
The 5/1 ARM was the only product to see a rate decrease, falling to 5.94%.
Separate index shows muted intent
Data from a separate metric, the Xactus Mortgage Intent Index, told a different story. This index, which tracks credit-pull activity, declined by 2.92% to a reading of 116.3 for the week.
Thomas Lloyd, Xactus's chief strategy officer, said the index was 7.75% lower than the same week last year. He attributed the muted activity to high mortgage rates and seasonal factors ahead of the Labor Day weekend.
"The latest reading marks the lowest non-holiday level for the index this year," Lloyd stated. He said this highlights how sensitive borrower intent is to the current rate environment.
