Adjustable-rate mortgage applications rise as 30-year rates climb
The share of mortgage applications for adjustable-rate loans increased to 8.5% last week, while the average rate on 30-year fixed mortgages rose to 6.85%, the highest since June.
The Mortgage Bankers Association reported that applications for adjustable-rate mortgages (ARMs) accounted for 8.5% of all mortgage requests last week, up from 8% the prior week and the highest level since June. In contrast, demand for ARMs during the early pandemic was around 3% when rates were at historic lows.
The average rate on a 30-year fixed-rate mortgage with a conforming loan balance of $832,750 or less rose to 6.85% from 6.79% the week before, with points increasing to 0.67 from 0.65. The average rate for a five-year ARM fell to 5.82% from 5.94%.
Overall mortgage application volume declined 2.7% week over week. Refinance applications dropped 6% and were 25% lower than a year ago, marking the slowest pace since May 2025. Purchase-loan applications were essentially unchanged, slipping 0.2% for the week but remaining 4% higher than a year earlier.
"Mortgage rates moved higher last week, driven by ongoing investor concerns over inflation and the federal budget deficit. The 30-year fixed rate increased to 6.85 percent, the highest since June 2025 and 36 basis points higher than a year ago," said Joel Kan, vice president and deputy chief economist at the MBA.
"Higher mortgage rates continue to weigh on prospective homebuyers looking to act, even as housing inventory has increased in many markets," Kan added.
A separate survey from Mortgage News Daily indicated that rates were unchanged at the start of the week, with investors awaiting upcoming inflation data that could influence future mortgage rates.