Mortgage rates jump to near 3-year high, causing demand to drop

Key Points:

• Mortgage rates have climbed for the sixth consecutive week, reaching 7.30% for 30-year fixed-rate mortgages, the highest since November 2023, causing a 6% drop in weekly mortgage demand per the Mortgage Bankers Association (MBA).
• Refinance applications have been particularly impacted, falling 9% for the week and down 56% compared to the previous year, with government refinances declining 13%, including significant drops in FHA and VA loans.
• Purchase mortgage applications decreased by 4% weekly and are 14% lower than a year ago, as rising rates and accelerating home price gains (1.9% annual increase in July) continue to challenge buyers.
• Adjustable-rate mortgage applications have risen to 10.3% of total applications, the highest share since October 2025, due to their rates being about 80 basis points lower than fixed-rate loans.
• Rates continued to rise early this week, with the 30-year fixed average hitting 7.58%, influenced by bond market reactions to Federal Reserve policy, economic growth, and inflation concerns despite recent oil price drops.