US mortgage rates top 7% as applications retreat

US mortgage rates rose above 7% in reports published on September 30 and October 1, with CNBC saying rates had increased for six consecutive weeks to their highest level since November 2023. Mortgage applications declined, while a growing share of buyers turned to adjustable-rate loans carrying lower initial rates than fixed-rate mortgages.¹²

Several measures exceed 7%

The Mortgage Bankers Association’s average contract rate for conforming 30-year fixed mortgages increased to 7.30% from 7.12%, according to CNBC. Points rose to 0.75 from 0.73. The figures applied to conforming loan balances of $832,750 or less, and remain single-source reports in the dossier.¹

Mortgage News Daily separately reported that the average 30-year fixed mortgage rate reached 7.58% at the beginning of the week, according to CNBC. The New York Times reported on October 1 that the average 30-year fixed home-loan rate was 7.28%, compared with 6.34% a year earlier. The sources therefore reported different averages, although each placed the rate above 7%.¹²

Applications decline

CNBC said overall mortgage applications dropped 6% in the Mortgage Bankers Association’s seasonally adjusted weekly measure. Applications for mortgages used to purchase homes declined 4% from the previous week and were 14% below their level in the corresponding week a year earlier.¹

CNBC reported that refinance applications dropped 9% for the week and 56% from a year earlier, although the dossier classifies those figures as disputed within the source record. Refinancing’s share of all mortgage applications decreased to 38.3% from 39.3%, according to the same report.¹

Government refinance applications fell 13%, according to Joel Kan, an economist at the Mortgage Bankers Association. He said applications involving the Federal Housing Administration and Department of Veterans Affairs both recorded double-digit weekly declines.¹

Borrowers consider adjustable rates

Adjustable-rate mortgages represented 10.3% of applications, their largest share since October 2025, CNBC reported. Kan said rates on these loans were about 80 basis points below those on fixed-rate mortgages. The New York Times also reported that more buyers were turning to adjustable-rate products as fixed borrowing costs rose.¹²

The increase in borrowing costs came as national home prices continued to rise on an annual basis. The S&P Cotality Case-Shiller index showed prices increasing 1.9% in July compared with July 2025, CNBC reported. That was faster than the 1.6% annual increase recorded in June.¹

Bond-market repricing

Mortgage News Daily COO Matthew Graham said shifting expectations in bond markets drove the most recent rise in mortgage rates. He said the market was reassessing the outlook for Federal Reserve policy, economic growth and inflation. Graham also noted that rates increased despite a sizeable decline in oil prices on Tuesday.¹