MBA Chart of the Week: Mortgage Applications and Rates

Source: MBA Mortgage Applications Survey

Financial markets have experienced a significant shift in recent months, with rising Treasury yields putting renewed upward pressure on mortgage rates. The 10-Year Treasury yield is currently close to 5.2 percent. In February 2026, the 10-year was around 4 percent. Higher energy prices caused by the ongoing war in Iran, higher inflation, expectations of tighter monetary policy, stronger economic growth, and ballooning federal debt have pushed Treasury yields higher and mortgage rates have followed. According to MBA’s Weekly Applications Survey, the 30-year fixed mortgage rate was 7.1 percent last week after an increase of 30 basis points over the past month, pushing the rate a full percentage point higher than in early 2026. Last week’s 7.1 percent 30-year fixed rate was the highest since 2024.

This week’s Chart of the Week illustrates the impact of rising rates on mortgage application activity. In early 2026, the 10-year was around 4 percent, and mortgage rates were a little above 6 percent. Earlier this year we saw growth in refinance activity as borrowers who obtained loans over the past three years were able to take advantage of lower market rates. However, starting in May, mortgage rates stayed above 6.5 percent and that increase in rates quickly shut off a large portion of refinance activity. The current pace of weekly refinancing is around 35 percent below what it was in January. 

Home purchase applications showed more resilience through the middle of 2026, with homebuyers still active in the market even with rates around 6.5 percent. Higher levels of for-sale inventory and slower home price growth offset some of the upward move in rates. However, as rates continued to move higher in recent weeks, purchase applications dropped off and started to lag early 2026 levels. The impact of reduced purchasing power, higher prices in non-housing expenditures, macroeconomic uncertainty are some factors contributing to homebuyers pulling back and delaying their purchase decisions.    

MBA’s current forecast is for mortgage rates to average close to 6.8 percent in the coming quarters and this has started to show up in weaker purchase applications and home sales over the past few months. As discussed earlier, refinance activity also continues to slow as rates at these levels have reduced any benefit to refinancing for many borrowers. As a result of these developments, we revised our expectations for originations in 2026 and 2027 lower in the September forecast published last week.