US mortgage rates at three-year high of 7.3%

Investing.com -- US mortgage rates increased for the sixth consecutive week, reaching their highest level in almost three years and creating additional obstacles for potential homebuyers.

The contract rate on a 30-year fixed mortgage rose 18 basis points in the week ended Sept. 25 to 7.30%, marking the highest level since November 2023, according to Mortgage Bankers Association data released today. The rate on a five-year adjustable mortgage jumped 37 basis points to 6.47%, the highest in more than two years.

The MBA purchase index, which tracks loan applications, dropped 4.3% to the lowest level since April 2025. The group's refinance gauge fell 8.7%, continuing a decline that began in mid-August.

Mortgage rates follow 10-year Treasury note yields, which have been rising as conflict in the Middle East and the Russia-Ukraine war maintain elevated energy costs and overall inflation. On Tuesday, the 10-year yield reached the highest level in more than 19 years.

Concerns about government debt and recent data showing solid economic activity are also contributing to higher borrowing costs. The Federal Reserve raised its benchmark rate earlier this month for the first time since 2023 to control inflation. Investors expect the central bank will increase rates again by year-end.

"Mortgage rates above 7% will keep more people tethered to their current homes because the gap between homeowners' existing 3% or 4% mortgages and today's higher rates is getting wider," said Mark Fleming, chief economist at title insurer First American Financial Corp.

Fleming added that while sales could slow further, a large price drop is unlikely without a major economic downturn that causes forced sales like foreclosures. Prices are "downside sticky," he said. "They generally slow down or stop going up."

Sales of previously owned homes, which represent the majority of the US housing market, fell in August to their weakest pace in more than a year.

The MBA survey covers more than 75% of all retail residential mortgage applications in the US.

Original Article

You May Also Be Interested In

• Crude Inventory 0.9M Barrels Last Week - EIA
• MongoDB stock rebounds after CEO exit selloff
• Bridgewater CEO Warns That AI Threatens ‘Societal Breakdown’ - Bloomberg