Mortgage borrowing costs hit three-year high as borrowers step away
ITB•The average 30-year fixed mortgage rate rose 19 basis points to 7.49%, its highest since October 2023. Total mortgage demand fell 4.2% last week, with home-purchase applications down 2.1% and refinancing applications down 7.5%.
1. Rates rise, demand falls
The average 30-year fixed mortgage rate climbed 19 basis points to 7.49% last week, the highest level since October 2023. Applications to purchase homes fell 2.1%, refinancing applications slid 7.5%, and total mortgage demand dropped 4.2%.
2. Refinancing at a low
Refinancing accounted for 37% of mortgage applications. MBA deputy chief economist Joel Kan said few homeowners had an incentive to refinance at these rates and that higher borrowing costs had led potential buyers to step back. He said refinancing applications were at their lowest level since 2025 and less than half last year's pace.
3. Housing stocks lag
The S&P 1500 Homebuilding Index and PHLX Housing Sector Index have largely underperformed the broader market since March. So far this year, they are down 8.5% and 11.0%, respectively, while the S&P 500 is up 14.2%.
