MortgageApplications News & Analysis

Mortgage Demand Drops as Rates Hit 3-Year High

Mortgage rates recently increased to their highest level in nearly three years, causing a decline in demand for both refinances and home purchases. The Mortgage Bankers Association reported a decrease of 4.2% in total mortgage application volume from the prior week. The average interest rate for 30-year fixed-rate mortgages went up to 7.49% from 7.30%, with origination fees included, for loans with a 20% down payment. Applications to refinance dropped by 8% within the week and were down 56% compared to the same week last year. Joel Kan from the MBA noted that refinance applications have reached their lowest level since 2025, as few homeowners see benefit in refinancing at current rates. Mortgage applications for home purchasing also fell by 2% over the week and by 15% from a year ago, with FHA purchase applications dropping by 6% due to affordability challenges. This matters for investors as declining mortgage applications suggest decreased activity in the housing market, impacting related investments. Rising interest rates make it harder for potential buyers to purchase homes, decreasing demand and affecting the broader real estate sector.