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Mortgage rates hit highest level in 3 weeks, weakening demand further
CNBC • • business
Key Points:
- Mortgage interest rates rose last week, with the average rate for 30-year fixed mortgages increasing to 6.78%, the highest in three weeks, leading to a 1% decline in total mortgage application volume.
- Refinancing applications fell 2% weekly and were 17% lower than the same period last year, with FHA and VA loan refinances particularly affected and the average refinance loan size at its lowest since June 2025.
- Home purchase mortgage applications dropped 0.3% for the week and were 5% lower than a year ago, with a notable 7% decrease in FHA loan applications contributing to a slowdown in purchase activity over the past two months.
- Despite higher rates, fewer buyers are using all-cash offers, reducing competition and increasing sellers' willingness to accept financed offers, according to Realtor.com.
- Mortgage rates declined this week following a drop in oil prices linked to positive news in the peace process via Pakistani mediators, as falling oil prices influenced bond yields, which correlate with mortgage rates.
