Mortgage rates climb to three-year peak, weekly demand falls
The average 30-year fixed mortgage rate rose to 7.30%, prompting a 6% drop in overall mortgage applications and a sharper decline in refinance requests.
Mortgage rates rose for the sixth consecutive week, reaching the highest level since November 2023 and pushing the Mortgage Bankers Association's seasonally adjusted index down 6% over the past week. The average contract rate for 30-year fixed-rate mortgages on conforming loans (up to $832,750) increased to 7.30% from 7.12%, while points rose to 0.75 from 0.73 for borrowers putting down 20%.
Refinance activity fell sharply, with applications down 9% and 56% lower than a year earlier, reducing the refinance share of total mortgage applications to 38.3%. > "Government refinances declined 13 percent, with both FHA and VA applications experiencing double digit decreases over the week," said Joel Kan, an economist with the Mortgage Bankers Association.
Purchase-mortgage applications slipped 4% and were 14% lower than a year ago. At the same time, home prices continued to rise, gaining 1.9% nationally in July compared with July 2025, up from a 1.6% annual increase in June, according to the S&P CoreLogic Case-Shiller index.
Adjustable-rate mortgages, which carry rates about 80 basis points below fixed-rate loans, accounted for 10.3% of applications, the highest share since October 2025. Early this week the average 30-year fixed rate climbed to 7.58%, the highest since November 2023, as bond markets adjusted expectations for Federal Reserve policy and inflation. > "Mortgage rates moved higher again on Tuesday as the bond market continues recalibrating expectations for Fed policy, economic growth, and inflation," wrote Matthew Graham, chief operating officer at Mortgage News Daily.