Mortgage Rates Reach One-Year High, Demand Falls

Mortgage rates climbed to their highest level in more than a year, pushing application volume below the pace recorded twelve months earlier for the first time since April. The Mortgage Bankers Association reported that the average contract rate on 30-year fixed loans with balances up to $832,750 rose to 6.81 percent from 6.76 percent in the latest week, while total applications fell 2.9 percent from the prior week and 5 percent from the same week in 2025.

MBA chief economist Mike Fratantoni linked the increase to longer-term rates that rose after the July Federal Open Market Committee meeting. Refinance applications dropped 2 percent for the week and 9 percent year over year; purchase applications fell 4 percent for the week and 3 percent from a year earlier. A separate daily survey from Mortgage News Daily showed the 30-year fixed rate at 6.60 percent on August 5, with mixed daily moves tied to shifting oil prices after negotiations over the Strait of Hormuz.

Higher rates have narrowed the pool of homeowners who can refinance profitably and have offset any price concessions buyers might obtain in slower markets. The annual decline in volume marks a reversal after months of year-over-year gains, indicating that the recent run-up in borrowing costs has begun to restrain both purchase and refinance activity.