Mortgage Rate Hits 7.30%, a Near Three-Year High, as Applications Fall 6%

The average 30-year fixed mortgage rate climbed to 7.30% last week, its sixth consecutive weekly increase and the highest reading since November 2023, and borrowers pulled back sharply. Mortgage applications fell 6% for the week ending Sept. 25, with purchase and refinance volume both dropping to their slowest weekly pace since 2025.

The figures come from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey, released Sept. 30. The trade group’s Market Composite Index, which tracks loan application volume, fell 6% on a seasonally adjusted basis from the prior week and 6% unadjusted.

“Mortgage rates jumped to their highest level in almost three years, pushing borrowers to the sidelines. The 30-year fixed rate increased for the sixth consecutive week to 7.3%, the highest rate since November 2023,” said Joel Kan, CMB, the MBA’s vice president and deputy chief economist. “Mortgage applications fell by 6% due to the recent surge in rates, with purchase and refinance applications both declining to their slowest weekly pace since 2025.”

Refinancing has effectively shut down

The refinance side of the business absorbed the worst of it. The Refinance Index fell 9% from the previous week and sat 56% below the same week a year earlier — a drop that leaves the channel running at less than half of last year’s volume. Refinances slipped to 38.3% of all applications from 39.3% the week before.

Government-backed refinancing fell hardest. “Government refinances declined 13%, with both FHA and VA applications experiencing double digit decreases over the week,” Kan said.

Purchase demand held up better in relative terms but is still eroding. The seasonally adjusted Purchase Index fell 4% week over week; unadjusted, it was down 5% from the prior week and 14% lower than the same week in 2025.

Borrowers are reaching for adjustable rates

With fixed rates above 7%, more applicants are trading rate certainty for a lower payment. Adjustable-rate mortgages accounted for 10.3% of applications, up from 9.8% a week earlier.

“ARM loans, with rates around 80 basis points lower than fixed rate loans, accounted for 10.3% of applications, the highest share since October 2025,” Kan said. The survey puts the average contract rate on a 5/1 ARM at 6.47%, 83 basis points below the 30-year fixed rate. On a $400,000 loan, that spread is worth roughly $222 a month in principal and interest — a calculation based on the survey’s reported rates, and one that ignores the reset risk an ARM carries after its fixed period ends.

The ARM share has been climbing for weeks as the fixed-rate market moved against buyers. In the survey covering the week ending Sept. 18, the 30-year fixed rate had reached 7.12% and the ARM share 9.8%.

Rates rose across every loan product

Every category the MBA tracks moved higher, and in most cases borrowers paid more in points as well:

• 30-year fixed, conforming (balances of $832,750 or less): 7.30%, up from 7.12%, with points rising to 0.75 from 0.73 on 80% loan-to-value loans.
• 30-year fixed, jumbo (above $832,750): 7.27%, up from 7.15%, with points falling to 0.50 from 0.53.
• 30-year fixed, FHA-backed: 6.97%, up from 6.78%, with points jumping to 1.18 from 0.96.
• 15-year fixed: 6.56%, up from 6.43%, with points easing to 1.02 from 1.15.
• 5/1 ARM: 6.47%, up from 6.10%, with points rising to 1.20 from 0.76.

The effective rate — which folds points and fees into the borrowing cost — increased for every product, including the ARM, whose contract rate had fallen the week before.

Loan-program shares were close to flat. The FHA share of applications was unchanged at 16.7%, the VA share slipped to 11.9% from 12%, and the USDA share eased to 0.5% from 0.6%.

A market squeezed from both directions

The rate move lands on a market already showing strain. The Conference Board’s September reading, released Sept. 29, showed consumer confidence falling to 81.9 with households turning negative on their own finances. Home-price growth, meanwhile, is running well behind inflation: S&P Case-Shiller’s national index rose 1.9% in the year through July.

For sellers, that combination is the problem. Buyers qualifying at 7.30% can carry less debt than they could two months ago, but the homes on the market were priced when rates were lower. On our reading, the 14% year-over-year drop in unadjusted purchase applications is the cleanest measure of that gap — it captures buyers who are not making offers at all, not just buyers negotiating harder.

Federal Reserve officials have signaled that relief is not imminent. Governor Michael Barr has said more rate increases are likely even with home affordability at a 21-year low.

The MBA survey covers U.S. closed-end residential mortgage applications originated through retail and consumer-direct channels. It has been conducted weekly since 1990, with respondents including mortgage bankers, commercial banks, thrifts and credit unions; the base period for all indexes is March 16, 1990 = 100. More mortgage coverage is collected on our mortgage page.