Mortgage demand from homebuyers drops 19% from a year ago, as interest rates surge abruptly higher
Mortgage demand from homebuyers drops 19% from a year ago, as interest rates surge abruptly higher. Davis Paul Morris | Bloomberg | Getty ImagesFast-rising interest rates are taking their toll on mortgage demand, as both potential homebuyers and current homeowners head to the sidelines.
What happened
Mortgage rates have surged to the highest level since the start of 2025, causing a major pullback in mortgage demand. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, increased to 6. "Ongoing market concerns over spiking energy prices, persistently high inflation, and future monetary policy pushed bond yields and mortgage rates higher last week," said Joel Kan, vice president and deputy chief economist at the MBA. Mortgage rates continued to move higher to start this week.
Rates are now almost a full percentage point higher than they were a year ago. That is a weekly average run by the MBA, but by last Thursday, rates had moved over 7%, according to a separate survey from Mortgage News Daily. Last year at this time, the interest rate on the 30-year fixed was 58 basis points, or more than half a percentage point, lower.
The wider picture
Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuKey PointsLast week's average rate on the 30-year fixed was 6. 22%Applications to refinance a home loan dropped 9% for the week and were 65% lower than the same week one year ago. 1% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. "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," Kan added.
While the supply of homes for sale has been gaining in much of the country, much of that supply is on the higher end of the market. 22% on Tuesday, according to Mortgage News Daily, just ahead of the next meeting of the Federal Reserve on Wednesday. 33%, which is is the most abrupt jump since October 2024," wrote Matthew Graham, chief operating officer at Mortgage News Daily. How rising bond yields impact American consumersHow rising bond yields impact American consumersCloseThe 10-year Treasury yield has surpassed 5% and reached its highest level since 2007.
What has been reported
A sign outside a home for sale in Crockett, California, US, on Thursday, Sept. Last week's results include a separate adjustment for the Labor Day holiday. 67, including the origination fee, for loans with a 20% down payment. Get Property Play directly to your inboxCNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Potential buyers are still contending with high home prices. "Over the past 6 [business] days, the average is up 0.
"At least some of the recent volatility is due to the implications of recent economic data and oil price implications on Fed policy. " Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
What happens next
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The report has been compiled by The Daily Waves using information reported across cnbc.com, bbc.co.uk. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.