New homes for sale are advertised in Huntington Beach, California on Sept. 25, 2026. <\/p>\n
Frederic J. Brown | AFP | Getty Images<\/p>\n
Mortgage rates last week rose to the highest level in nearly three years. That kept demand for both refinances and home purchases on their steep and steady decline.\u00a0<\/p>\n
Total mortgage application volume dropped 4.2% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.\u00a0<\/p>\n
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, increased last week to 7.49% from 7.30%, with points rising to 0.84 from 0.75, including the origination fee, for loans with a 20% down payment.<\/p>\n
Applications to refinance a home loan, which are highly rate-dependent, dropped 8% for the week and were 56% lower than the same week one year ago.\u00a0As rates rise each week, the pool of eligible refinances drops.<\/p>\n
“Very few homeowners have an incentive to refinance at these rates,” said Joel Kan, an MBA economist, in a release. “With rates roughly a percentage point higher than a year ago, refinance applications last week were at the lowest level since 2025 and fell to less than half of last year’s pace.”<\/p>\n
Applications for a mortgage to purchase a home declined 2% for the week and were 15% lower than the same week one year ago.<\/p>\n
“Purchase activity decreased across all loan types with FHA purchase applications falling the most, declining 6%, as these higher rates add to ongoing affordability challenges for many homebuyers,” Kan added. “As noted in recent weeks, a higher share of borrowers are opting for ARMs [adjustable-rate mortgages] to lower their initial payments, with the ARM share steady at 10.3% last week.”<\/p>\n
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