Mortgage Rates Reach Nearly Three-Year High, Driving Decline in Demand
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 7.49% last week from 7.30%, marking the highest level in nearly three years. This increase continued a trend of declining demand for both home purchases and refinances, as total mortgage application volume dropped by 4.2%. Refinance applications fell sharply—8% weekly and 56% year-over-year—to their lowest levels since 2025. Applications to purchase homes also declined, down 2% week-on-week and 15% compared to the same period last year. The ARM share of applications remained steady at 10.3%, as more borrowers opt for these lower initial payment options amid affordability challenges. Despite a slight pullback in rates this week according to Mortgage News Daily, levels remain near historic highs since 2003.
