WASHINGTON, DC — Mortgage rates kept moving higher for the sixth week in a row, pushing borrowing costs to their highest level since November 2023 and cutting into demand for both home purchases and refinances. The Mortgage Bankers Association said total weekly mortgage applications fell 6% on a seasonally adjusted basis.
The average contract rate on a 30-year fixed mortgage with conforming loan balances of $832,750 or less rose to 7.30% from 7.12%. That estimate includes points rising to 0.75 from 0.73 for loans with a 20% down payment.
That combination of higher rates and still-elevated home prices is making it harder for many borrowers to find a deal that pencils out.
Refinance Borrowers Are Feeling the Pain First
Refinance demand took the sharpest hit as fewer homeowners could benefit from switching loans at current levels. Applications to refinance dropped 9% in one week and were 56% lower than the same week a year earlier.
The refinance share of overall mortgage activity slipped to 38.3% from 39.3% the previous week. Joel Kan, an MBA economist, said government refinances fell 13%, with both FHA and VA applications posting double-digit declines over the week.
Those numbers suggest that borrowers who locked in lower rates in earlier years are largely staying put, while the remaining pool of potential refinancers has become much smaller.
Homebuyers Also Backed Away as Rates and Prices Stay Elevated
Purchase applications fell 4% for the week and were 14% below the same period last year. The pullback shows that higher monthly payments are still weighing on buyers even as the spring and summer homebuying seasons have passed.
The problem is not just rates. Home prices are still climbing from a year ago, and the pace of that growth picked up nationally. The S&P Cotality Case-Shiller index said July prices rose 1.9% from July 2025, up from a 1.6% annual gain in June.
For many households, that means the sticker price of a home and the cost of financing it are both moving in the wrong direction at the same time.
More Buyers Are Turning to Adjustable-Rate Mortgages
As fixed-rate loans became more expensive, some borrowers looked for alternatives. Adjustable-rate mortgage loans, which currently carry rates around 80 basis points below fixed-rate loans, accounted for 10.3% of all applications.
That was the highest share since October 2025, according to Kan. The move does not mean adjustable-rate loans are suddenly cheap, only that some buyers are searching for any edge they can find in a costly market.
For borrowers focused on short-term affordability, the lower starting rate can look attractive. But it also reflects a market where higher fixed rates are narrowing choices across the board.
Rates Rose Again at the Start of This Week
The pressure did not stop with last week’s data. Mortgage News Daily said the average 30-year fixed rate reached 7.58% early this week, the highest since November 2023.
Matthew Graham, chief operating officer at Mortgage News Daily, said rates moved higher again on Tuesday as the bond market adjusted expectations for Federal Reserve policy, economic growth and inflation. He added that the weakness was frustrating even with a fairly large drop in oil prices that day.
That points to a broader market dynamic: mortgage rates are being driven by more than one factor, and recent moves have kept buyers and refinancers under pressure.
What the Current Rate Spike Means for Households
The latest jump matters because even small changes in mortgage rates can alter monthly payments enough to change whether a home is affordable. When rates climb week after week, borrowers can lose the window to refinance or find that a purchase no longer fits their budget.
With refinancing down sharply, fewer homeowners can lower their payments or shorten their loan terms. And with purchase applications also slipping, higher rates are affecting both existing owners and people trying to buy for the first time.
For now, the market appears to be rewarding borrowers who can act quickly or use less traditional loan products, while leaving many others on the sidelines.
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