7.49% Mortgage Rate Sends Applications Lower, Refis Tumbling
By CU Today Staff —
WASHINGTON—Mortgage applications fell 4.2% from the previous week as the 30-year fixed mortgage rate climbed to its highest level in nearly three years, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Oct. 2.
MBA said its seasonally adjusted Market Composite Index declined 4.2%, while the Refinance Index dropped 8% and was 56% below the same week a year ago. The seasonally adjusted Purchase Index declined 2%, with the unadjusted Purchase Index down 15% from a year earlier.
“Mortgage rates moved to their highest level in almost three years last week, with the 30-year fixed rate reaching 7.49% as both Treasury rates increased and spreads widened with the increase in rate volatility,” said Joel Kan, CMB, MBA’s vice president and deputy chief economist. “Very few homeowners have an incentive to refinance at these rates, and the jump in borrowing costs has caused many potential borrowers to step back from the purchase market. With rates roughly a percentage point higher than a year ago, refinance applications last week were at the lowest level since 2025 and fell to less than half of last year’s pace.”
The average contract rate for conforming 30-year fixed mortgages rose to 7.49% from 7.30%, while the 15-year fixed rate increased to 6.71% from 6.56%.
“Purchase activity decreased across all loan types with FHA purchase applications falling the most, declining 6 percent, as these higher rates add to ongoing affordability challenges for many homebuyers,” Kan said.
The adjustable-rate mortgage share of applications remained at 10.3%, while refinancing accounted for 37% of total application activity, down from 38.3% a week earlier.
Originally reported by CU Today.