Investing.com -- Mortgage rates climbed to their highest point since 2024 last week, leading to a drop in loan applications and pushing more borrowers toward adjustable-rate products. Total mortgage application volume fell 1.5% from the prior week, according to the Mortgage Bankers Association's seasonally adjusted index.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less rose to 7.12% from 6.97%. Points increased to 0.73 from 0.72, including the origination fee, for loans with a 20% down payment.

Refinancing applications declined 3% for the week and stood 62% below the same week one year earlier. This marked the lowest level since February 2025. The 30-year fixed rate was 78 basis points lower at the same time last year.

Mortgage applications for home purchases decreased 1% for the week and were 11% lower compared to the same period a year ago. The fall housing market, typically the second-busiest season after spring, is now in progress. Real estate agents have reported a sharp pullback in activity due to the higher rates.

Buyers and current homeowners are seeking ways to reduce costs, with some turning to adjustable-rate loans despite the added risk.