U.S. mortgage applications fell 4.1% in the week ended Sept. 11 as borrowing costs approached 7%.
Refinancing applications dropped 9%, while home-purchase applications declined 1%.
The average rate on a conforming 30-year fixed mortgage rose to 6.97%, its highest level since May 2025.
If you’ve decided to continue renting, you aren’t the only one. U.S. mortgage applications declined last week, as rising bond yields pushed home-loan rates toward 7%, prompting prospective buyers to pause and reducing the incentive for homeowners to refinance.
The Mortgage Bankers Association’s Market Composite Index, a measure of total mortgage application volume, fell 4.1% on a seasonally adjusted basis in the week ended Sept. 11. On an unadjusted basis, applications dropped 15%.
The average contract interest rate for 30-year fixed mortgages with conforming loan balances of $832,750 or less increased to 6.97% from 6.85% a week earlier. That was the highest rate recorded by the survey since May 2025.
“Ongoing market concerns over spiking energy prices, persistently high inflation, and future monetary policy pushed bond yields and mortgage rates higher last week,” Joel Kan, MBA’s vice president and deputy chief economist, said in the release. As the 10-year Treasury yield moved closer to 5%, mortgage rates followed, he noted.
Rising borrowing costs
Higher borrowing costs weighed on both major segments of the market. The seasonally adjusted Purchase Index decreased 1% from the previous week, while the unadjusted index fell 13% and was 19% below its level during the comparable week in 2025.
Kan said that, after accounting for the Labor Day holiday, elevated rates caused many prospective buyers to put their purchase decisions on hold.
Refinancing activity weakened more sharply. The Refinance Index fell 9% for the week and was 65% lower than a year earlier. Rates near 7% eliminated much of the potential savings from refinancing, producing declines in conventional, Federal Housing Administration and Department of Veterans Affairs applications, Kan said.
Huge drop in refinancing
The refinance share of total mortgage activity decreased to 39.4% from 40.9% the previous week. Adjustable-rate mortgages accounted for 8.4% of applications.
Among government-backed loans, the FHA share declined to 16.9% from 17.2%, while the VA share rose to 12.4% from 12%. The U.S. Department of Agriculture share slipped to 0.4% from 0.5%.
Other mortgage categories also became more expensive. The average rate for jumbo 30-year loans increased to 7.03% from 6.74%, while the rate on 15-year fixed mortgages rose to 6.30% from 6.17%.