Mortgage applications in the US declined last week as the 30-year fixed rate reached its highest level since May 2025 amid rising US Treasury yields and oil prices, the Mortgage Bankers Association said Wednesday.
The market composite index, which measures loan application volume, decreased 4.1% on a sequential basis in the week through Sept. 11. Without adjustments, the index plunged 15%.
The average interest rate for 30-year fixed mortgages with conforming loan balances of $832,750 or less jumped to 6.97% from 6.85% a week ago, the highest it's been since May 2025, MBA Deputy Chief Economist Joel Kan said.
For loan balances higher than $832,750, the rate climbed to 7.03% from 6.74%. For 15-year loans, the rate increased to 6.3% from 6.17% week to week.
"Ongoing market concerns over spiking energy prices, persistently high inflation, and future monetary policy pushed bond yields and mortgage rates higher last week," said Kan. "As the 10-year Treasury inched closer to the 5% mark, mortgage rates followed and were almost 7%."
On Tuesday, the 10-year Treasury yield hit 5.041%, its highest since July 2007, CNBC reported. Oil prices have rallied so far this month, while official data showed last week that US consumer inflation and producer prices hit three-month highs in August.
The Federal Reserve is scheduled to announce its interest rate decision later today. Markets are currently pricing in a 93% probability that the Federal Open Market Committee will lift its policy rate by 25 basis points, according to the CME FedWatch tool.
The refinance index slid 9% on a weekly basis and slumped 65% from the year before. "The current level of rates also eliminated much of the benefit to refinance for many borrowers, resulting in declines in conventional, (Federal Housing Administration and Veterans Affairs) refinance applications," Kan said.
The seasonally adjusted purchase index ticked down 1% from a week earlier, as higher rates prompted many buyers to "pause" their purchase decisions, according to Kan. Without adjustments, the index retreated 13% and was 19% lower than a year ago.
Last week, the National Association of Realtors said August existing home sales in the US hit the lowest level since June 2025 amid persistent affordability headwinds.
Separately, Zillow Group (Z, ZG) said home sales fell annually last month as high mortgage rates dampened buyer demand and pushed more prospective buyers into a strengthening rental market.
