Mortgage Rates Rise to Highest Since August 2025, Home Purchase Applications Drop 7%

According to CNBC, mortgage rates rose last week to the highest level since August 2025, causing homebuyer demand for loans to pull back while refinance demand moved higher. Total mortgage application volume dropped 2.7% last week compared with the previous week, based on the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less increased to 6.65% from 6.58%, with points rising to 0.67 from 0.64 for loans with a 20% down payment. Applications for a mortgage to purchase a home fell 7% from the previous week and were 2% lower than the same week one year ago, as buyers contend with high home prices and lean supply of affordable homes. Applications to refinance a home loan increased 4% for the week and were 7% higher than the same week one year ago, though rates were just 17 basis points higher than last year. Joel Kan, MBA's vice president and deputy chief economist, said in a release that despite higher mortgage rates, refinance applications increased, led by FHA and VA refinance applications rising 9% and 10%, respectively. The refinance share of mortgage activity increased to 43.2% of total applications from 40.6% the previous week. Mortgage rates jumped higher to start this week, according to a separate survey from Mortgage News Daily. Matthew Graham, chief operating officer at Mortgage News Daily, wrote that the key contributor to the recent spike has been the uptick in fuel prices in July combined with rates never making it lower than 6.52% over the past two months, adding that the uptick in fuel prices gave rates a push. Rates recovered a little Tuesday after a read on inflation came in much lower than expected.