Mortgage Rates Surge to Highest Level Since Fall, Demand Plummets 10.5%

Mortgage demand experienced a sharp decline last week as interest rates climbed to their highest point in over six months, according to data released Wednesday by the Mortgage Bankers Association (MBA). The MBA’s seasonally adjusted index showed a 10.5% decrease in total mortgage application volume compared to the previous week.

The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances ($832,750 or less) rose to 6.43% from 6.30%, with points increasing from 0.63 to 0.65, including the origination fee, for loans with a 20% down payment. This marks the highest rate since October 2025, according to Joel Kan, MBA’s vice president and deputy chief economist.

“The threat of higher for longer oil prices continued to retain Treasury yields elevated, and mortgage rates finished last week higher,” Kan stated. “The 30-year fixed rate rose to 6.43 percent, more than 30 basis points higher than at the end of February.”

The surge in refinance activity seen in recent months has begun to reverse course, with refinance demand dropping 15% for the week. Despite the decline, refinance applications remained 52% higher than the same week last year, when the 30-year fixed rate was 28 basis points higher. Refinances now account for 49.6% of total mortgage activity, down from a 60% share in mid-January.

Purchase applications also decreased, falling 5% for the week and remaining only 5% higher than the same week one year ago.

Kan noted that rising mortgage rates, combined with ongoing affordability challenges and economic uncertainty, are prompting some potential homebuyers to pause their searches. “Higher mortgage rates, coupled with affordability constraints and economic uncertainty, pushed some potential homebuyers to the sidelines,” he said.

The share of adjustable-rate mortgages (ARMs) in the market is also increasing, reaching 8.1% of total applications. ARMs typically offer lower initial rates but carry the risk of future adjustments.

Mortgage rates experienced some volatility earlier this week following statements from President Donald Trump and Iranian leadership regarding ongoing war negotiations. Reactions in the bond market, which closely tracks mortgage rates, were swift, though analysts suggest the longer-term impact of recent disruptions has already been factored into pricing.

Matthew Graham, chief operating officer at Mortgage News Daily, explained that even a resolution to the conflict would not immediately return rates to February’s levels. “Even if the war were to end today, there’s been sufficient disruption to infrastructure and a big enough initial spike in energy prices to create what economists refer to as ‘second round effects,’” Graham wrote. “In simpler terms, Which means that inflation expectations and interest rates will not immediately return to February’s levels simply because the war is over.”