US Mortgage Rates Hit Three-Year High as Demand Drops
The Mortgage Bankers Association reports a decline in home purchase and refinance applications as 30-year fixed-rate mortgages climb to 7.49 percent.
Mortgage rates in the United States reached their highest level in nearly three years last week, triggering a decline in demand for both home purchases and refinances. The Mortgage Bankers Association reported that the average contract interest rate for 30-year fixed-rate mortgages rose to 7.49 percent, contributing to a 4.2 percent weekly drop in total mortgage application volume.
Refinance applications fell 8 percent for the week and remain 56 percent lower than a year ago. Purchase applications declined by 2 percent, with FHA purchase applications seeing the steepest drop at 6 percent. To manage higher initial payments, more borrowers are turning to adjustable-rate mortgages, which now represent 10.3 percent of applications, up from less than 3 percent during the early pandemic.
While Mortgage News Daily observed a slight pullback in rates to 7.56 percent this week, analysts are monitoring whether the upward momentum has shifted. Some observers note that recent long-term highs align with levels seen in late September, though it remains unclear if the current trend is waning.
