If you felt like borrowing got pricier fast, you are not imagining it. According to the Mortgage Bankers Association, total application volume fell 4.1% from the prior week on its seasonally adjusted index, which was further tweaked to account for Labor Day. The group's weekly average showed the contract rate for 30-year fixed mortgages with conforming loan sizes of $832,750 or less increasing to 6.97% from 6.85%. Upfront points, including the origination fee, rose to 0.72 from 0.67 on loans with 20% down.
At the MBA, vice president and deputy chief economist Joel Kan said, "Ongoing market concerns over spiking energy prices, persistently high inflation, and future monetary policy pushed bond yields and mortgage rates higher last week."
Refinancing, which tends to react quickly to rate moves, took the bigger hit. Refi applications fell 9% from the prior week and were 65% below the same week a year ago. A year earlier, the 30-year fixed rate was 58 basis points lower, erasing much of the payoff from refinancing now. As Kan put it, "The current level of rates eliminated much of the benefit to refinance for many borrowers, resulting in declines in conventional, FHA, and VA refinance applications."
Purchase activity also cooled. Applications to buy a home dipped 1% for the week and stood 19% under the level from the same week last year. Buyers are still wrestling with elevated prices, and while listings have increased in many markets, a lot of that new supply sits at the higher end.
When borrowing costs change, steady planning helps protect your savings and goals. Join Briefs Finance CEO Jaspreet Singh on September 29th for a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, where he shows how we're spotting investment opportunities as the dollar falls. Save your spot.
A separate look from Mortgage News Daily showed rates pushed past 7% by last Thursday. They kept grinding higher to start this week, with the average 30-year fixed at 7.22% on Tuesday, just ahead of the Federal Reserve's meeting on Wednesday. Matthew Graham, Mortgage News Daily's chief operating officer, wrote, "Over the past 6 [business] days, the average is up 0.33%, which is is the most abrupt jump since October 2024." "At least some of the recent volatility is due to the implications of recent economic data and oil price implications on Fed policy."
Compared with a year earlier, mortgage rates sit nearly 1 percentage point higher.
Higher rates are sidelining would-be movers and killing the math on many refis, which feeds into slower loan volume and skews sales toward the pricier end where inventory is showing up. If you are watching housing-linked corners of your portfolio, this backdrop tends to favor lenders with flexible product mixes and investors focused on markets where supply is actually loosening.
CNBC's Property Play with Diana Olick spotlights new and evolving opportunities for real estate investors, delivered weekly to your inbox. Subscribe to get Property Play in your email.
Long term success comes from calm decisions and a clear financial roadmap. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, on September 29th. Sign up free to join him live.
