The average contract interest rate on a 30-year fixed-rate mortgage climbed to 7.12% last week, the highest reading since May 2024, and the jump pushed nearly one in 10 borrowers into an adjustable-rate loan.
The figures come from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Sept. 18, released Sept. 23. The conforming 30-year rate rose 15 basis points from 6.97% the week before, with points increasing to 0.73 from 0.72 for 80% loan-to-value loans.
The adjustable-rate mortgage share of applications reached 9.8%, and the trade group said refinancing slowed to its weakest pace in more than a year and a half.
“Mortgage rates vaulted higher last week, with the 30-year fixed rate at 7.12% β the highest level since May 2024. With fixed rates much higher, more borrowers opted for ARMs, with the ARM share reaching 9.8%, as rates for 5/1 ARMs were more than a percentage point lower than those for fixed rate loans,” said Mike Fratantoni, MBA’s SVP and chief economist. “Applications for both refinance and purchase loans declined further last week, noting that the comparison is to the week that included the Labor Day holiday. With this week’s decline, the pace of refinancing fell to its slowest pace since February 2025.”
Application volume fell across the board
The Market Composite Index, the association’s measure of loan application volume, fell 1.5% on a seasonally adjusted basis from the prior week. Unadjusted, the index rose 9% β a comparison against a week whose results carried an adjustment for the Labor Day holiday, which the association flagged in the release.
The Refinance Index fell 3% week over week and was 62% below the same week a year ago. The seasonally adjusted Purchase Index slipped 1%; unadjusted, it rose 9% from the prior week but sat 11% below its year-ago level.
The refinance share of applications edged down to 39.3% from 39.4%. The FHA share fell to 16.7% from 16.9% and the VA share to 12% from 12.4%, while the USDA share rose to 0.6% from 0.4%.
Every fixed product moved higher; the ARM moved the other way
Rates rose across the fixed-rate menu. Jumbo 30-year loans (balances above $832,750) averaged 7.15%, up from 7.03%, with points falling to 0.53 from 0.59. FHA-backed 30-year loans rose to 6.78% from 6.62%, with points climbing to 0.96 from 0.85. The 15-year fixed rate reached 6.43%, up from 6.30%, with points at 1.15 versus 0.98.
The 5/1 ARM went the opposite way, falling to 6.10% from 6.23%, with points dropping to 0.76 from 0.99. That left 102 basis points between the conforming fixed rate and the 5/1 ARM β the gap Fratantoni pointed to in explaining the shift in borrower behavior.
The difference is large in monthly terms. On a $350,000 loan, principal and interest works out to roughly $2,357 a month at 7.12%, by RealtyWire’s calculation, against about $2,321 at last week’s 6.97% and about $2,121 at the 5/1 ARM rate of 6.10%. Put differently, a borrower accepting five years of rate certainty instead of 30 saves roughly $235 a month at current quotes β and takes on the risk of whatever the rate resets to.
The move came in a week of higher yields
The survey week followed the Federal Open Market Committee’s decision on Sept. 16 to raise the target range for the federal funds rate by a quarter point, to 3.75% to 4%. In its statement, the committee said inflation “remains elevated” and that the increase would “support a timelier return to the Committee’s 2 percent goal.” The vote was unanimous.
Mortgage rates track long-term bond yields rather than the Fed’s overnight rate, and those yields also rose. The 10-year Treasury closed at 5.01% on Sept. 18, according to the U.S. Treasury Department’s daily yield curve, up from 4.78% on Sept. 4. Neither the MBA release nor the Fed statement attributes the mortgage move to any single cause.
The trajectory is steep by recent standards. Two weeks earlier, the same survey put the conforming 30-year rate at 6.85%, then a 15-month high, and in early September Freddie Mac’s separate weekly survey recorded 6.71%. Fed Chair Kevin Warsh told the Jackson Hole symposium in August that housing strains would not change the central bank’s focus on inflation.
Freddie Mac publishes its next Primary Mortgage Market Survey on Thursday, Sept. 24, at noon Eastern β the next independent read on whether the 7% line holds. More coverage is in RealtyWire’s Mortgage section.
The MBA survey has run weekly since 1990 and covers closed-end residential applications originated through retail and consumer-direct channels, drawing on responses from mortgage bankers, commercial banks, thrifts and credit unions. All indexes use a base period of March 16, 1990 = 100.
