Homebuyers are adapting to the current environment of elevated mortgage rates, which have reached their highest level in over a month. According to the Mortgage Bankers Association, total mortgage application volume increased by 1.7% last week compared to the previous week.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances, which are $832,750 or less, rose slightly to 6.46% from 6.45%. The points associated with these loans decreased to 0.63 from 0.66, which includes the origination fee for loans with a 20% down payment.
Notably, applications for purchasing homes surged by 4% week-over-week and were up 7% compared to the same week last year. Despite initial buyer demand stalling at the beginning of the spring housing market, coinciding with the onset of the war with Iran, potential homebuyers have shown resilience, as noted by Joel Kan, an economist at the MBA.
He indicated that buyers are returning to the market despite uncertainties surrounding the economy and mortgage rates. Additionally, during a recent conference call, Lawrence Yun, the chief economist for the National Association of Realtors, reported a noticeable increase in buyer demand over the past few weeks.
On the refinancing front, applications fell by 1% for the week but were still 28% higher than the same week last year. Kan mentioned that refinance applications, which accounted for just over 40% of total applications last week, have reached their lowest share since July 2025.
The mortgage rates have seen a sharp increase at the start of this week, influenced by less optimistic news regarding the Iran war and a stronger-than-expected consumer price report, with the average rate on 30-year mortgages rising by 14 basis points so far this week, according to Mortgage News Daily