Mortgage applications fell as higher borrowing costs put more pressure on homebuyers.
The average interest rate on a 30-year fixed mortgage with a conforming loan balance climbed to 7.49% in the week ending October 2, up from 7.30% a week earlier, according to the Mortgage Bankers Association.
The rate was the highest since November 2023, Reuters reported.
Mortgage applications declined 4.2% on a seasonally adjusted basis. Applications to purchase a home fell 2%, while refinancing applications dropped 8%.
MBA economist Joel Kan attributed the increase to rising Treasury rates and wider mortgage spreads during a period of greater rate volatility. He said higher borrowing costs were causing some prospective buyers to step back.
Refinancing activity was 56% below the same week a year earlier, reflecting how few homeowners could benefit from replacing existing mortgages at current rates.
Adjustable-rate mortgages accounted for 10.3% of applications, unchanged from the previous week.
The 7.49% figure is a survey average for qualifying conforming loans, not a universal offer. Actual rates depend on factors including credit, down payment, loan terms and fees.
Illustrative housing photograph. Photo by todd kent on Unsplash.
