US 30-year mortgage rate tops 7%, hits 2-year high

The rise in mortgage rates last week led to a decline in refinancing and home purchase applications, the MBA said, and drove more borrowers into adjustable-rate mortgages, which offer lower upfront borrowing costs than fixed-rate mortgages and reset after a number of years to whatever the going rate is at the time. ARMs accounted for 9.8% of mortgage applications last week, the MBA said.

The MBA's index tracking overall mortgage application volumes slid to a 15-month low, led by a fourth weekly decline in refinancing applications to the lowest since February 2025.

The yield on 10-year US Treasury notes, a pricing benchmark for 30-year mortgages, has shot to the highest in nearly two decades, hovering around 5% and up from around 4% before the start of the war with Iran. The rise has been fueled by views that inflation may take longer to be brought back to the Fed's 2% target than previously expected and, more recently, signs that US economic growth is accelerating and demand is strengthening across the economy.