Weekly Real Estate News
Summary
Mortgage applications declined as the MBA's 30-year fixed contract rate rose 15 basis points to 7.12%, its highest level since May 2024.
Mortgage demand weakened again last week as borrowing costs moved sharply higher, with the Mortgage Bankers Association’s benchmark 30-year fixed contract rate climbing above 7% to its highest level in more than two years.
The MBA’s Weekly Mortgage Applications Survey for the week ending Sept. 18 showed the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rising 15 basis points to 7.12%, up from 6.97% the previous week. The rate was last higher in May 2024.
Overall mortgage application volume declined 1.5% on a seasonally adjusted basis from the prior week, extending the recent slowdown in borrower demand.
Purchase applications fell 0.8% to a four-week low, while refinance applications declined 2.6%, according to the MBA data. The sharp increase in fixed mortgage rates also pushed more borrowers toward adjustable-rate products.
The adjustable-rate mortgage share of total application activity climbed to 9.8%. The average rate on a 5/1 adjustable-rate mortgage fell to 6.10%, more than a percentage point below the 30-year fixed rate.
“Mortgage rates vaulted higher last week, with the 30-year fixed rate at 7.12% — the highest level since May 2024,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in the association’s release.
The latest MBA reading is a weekly contract-rate measure based on mortgage applications and should not be confused with other mortgage-rate surveys, which use different methodologies and can report different averages.
The move comes as Treasury yields remain elevated following renewed inflation concerns and the Federal Reserve’s latest monetary-policy action. Mortgage rates generally track movements in longer-term Treasury yields rather than the federal funds rate directly.
For prospective homebuyers, the return of mortgage rates above 7% adds another affordability obstacle at a time when home prices remain elevated in many markets. For lenders, the decline in both purchase and refinance applications underscores the pressure that higher borrowing costs continue to place on origination volume.
