30-year mortgage rate hits 7.28%, near 3-year high, as applications fall for fourth straight week

The average 30-year fixed mortgage rate climbed to 7.28% as of Thursday — its highest point since November 22, 2023, when it reached 7.29% — and it got there faster than it has in four years. The 0.25-percentage-point jump from last week's 7.03% is the steepest single-week rise since October 2022, according to Freddie Mac. It is the sixth consecutive weekly increase.

The surge is hitting an already weakened market hard. Mortgage applications fell 6% for the week ending September 25, the fourth straight weekly decline, according to the Mortgage Bankers Association. Purchase applications dropped 4% from the prior week and were 14% lower than the same week a year ago. Refinance applications fell 9% for the week and were 56% below year-ago levels.

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.— Joel Kan, Vice President and Deputy Chief Economist, Mortgage Bankers Association

The root cause, according to multiple sources, is the 10-year Treasury yield — the benchmark lenders use to price home loans. That yield stood at 3.97% in late February, before the U.S. and Israel attacked Iran. By midday Thursday it had surged to 5.27%, according to the Los Angeles Times — a level not seen since 2007, on the eve of the financial crisis. Expectations of higher inflation driven by surging oil prices have been the primary force pushing yields higher.

For a borrower financing a $400,000 home loan, the roughly one-percentage-point increase in rates since late February translates to approximately $276 more per month, according to the LA Times. The Wall Street Journal, as cited by the Deseret News, calculated that a buyer taking out a $500,000 mortgage at the current 7.28% rate would pay $3,421 a month — up from $2,991 at the sub-6% rates briefly available in February.

With fixed rates this high, more borrowers are turning to adjustable-rate mortgages. ARMs — which typically carry lower initial rates than 30-year fixed loans — made up 10.3% of all mortgage applications last week, their highest share since October 2025, according to the MBA. ARM rates ran roughly 80 basis points below fixed rates, though the average 5/1 ARM rate also moved higher, reaching 6.47%, according to MBA data reported by HousingWire.

Affordability and borrower demand have weakened in recent weeks as the higher-rate environment continues to put pressure on both prospective homebuyers and homeowners looking to refinance.— Bob Broeksmit, CEO, Mortgage Bankers Association

The broader housing market was already struggling before this latest rate spike. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low, according to the LA Times. In August, existing home sales fell 2% from July to a seasonally adjusted annual rate of 3.98 million units — their slowest annual pace in more than a year, the National Association of Realtors reported.

There are early signs that sellers are beginning to absorb the pressure. Around 20.8% of listings nationwide employed a price cut in the most recent monthly housing market trends report from Realtor.com, up 0.9 percentage points year over year.

Demand rarely picks up much this time of year regardless, but the rate environment and underlying geopolitical uncertainty made sure the housing market's fall stall came early this year.— Jake Krimmel, Senior Economist, Realtor.com

A separate measure of borrower activity reinforced the grim picture. The Xactus Mortgage Intent Index — which tracks anonymized credit-pull activity — fell 7.6% week over week to 108.9, its lowest non-holiday reading of the year and approximately 18.6% below the same week last year, according to HousingWire.

The index fell 7.6% week over week to 108.9, its lowest non-holiday reading of the year, and was approximately 18.6% below the same week last year.— Thomas Lloyd, Chief Strategy Officer, Xactus

The 15-year fixed rate — commonly used by homeowners refinancing — also climbed, rising to 6.60% from 6.42% last week, compared with 5.55% a year ago, according to Freddie Mac data reported by the LA Times.

Looking ahead, there is already speculation that rates could reach 8% by year's end. A Realtor.com report, citing MarketWatch, described that scenario as 'possible but not probable,' but noted that at a 7% rate and a median home price of $413,595, nearly 70% of U.S. households are already priced out of the market, according to Na Zhao, a principal economist at the National Association of Home Builders. A move from 7% to 8% would price out an additional 4.3 million households, Zhao said.

Daily rate trackers showed even higher figures in the days surrounding the Freddie Mac report. Mortgage News Daily's daily index put rates at 7.49% on Friday, down from a midweek peak of 7.6%, while U.S. News and World Report posted an average of 7.619%, based on Zillow data, according to the Deseret News.

Why it matters — With rates at a near three-year high and applications at their slowest pace since 2025, the housing market faces a deepening freeze that could price millions more households out of homeownership and push sellers to cut prices — with no clear catalyst for relief in sight.

Reported by axios.com, deseret.com, realtor.com, housingbrief.com, latimes.com, housingwire.com, bankrate.com