U.S. mortgage rates hold at 7.5%, pushing home purchase applications to a fresh low

At 7.50% for the week ending Oct. 9, the 30-year fixed mortgage rate remained at a level unseen since November 2023, a sustained cost burden that drove home purchase applications down to their weakest reading since early 2025, according to Bloomberg.

The Mortgage Bankers Association’s purchase index fell 4% on the week, extending its losing run to six straight weeks — a duration of consecutive losses not seen since the July–August 2023 period, according to Bloomberg. Overall application volume was off 2.7% week over week and sat 37.5% below where it stood at the same point last year, according to CNBC.

The contract rate on conforming loans — those at or below $832,750 — edged up 1 basis point from 7.49%, with points falling slightly to 0.83 from 0.84, according to CNBC. Rates have risen nearly a full percentage point since the end of June.

With fixed-rate costs elevated, more borrowers shifted toward adjustable-rate mortgages. ARMs captured 10.5% of all applications, a share not reached since October 2025, according to CNBC. MBA economist Joel Kan said in a release that "borrowers continue to rely more on ARM loans to help lower their monthly payments."

Refinance activity also weakened. Refinance applications slid 0.4% over the week and were running 56% behind year-ago levels, according to CNBC. The MBA's refinance gauge has now fallen for eight straight weeks.

Closed sales of previously owned homes rose slightly in September from August, the National Association of Realtors said Wednesday, but those transactions reflected contract signings made earlier in the summer when rates were lower. In a release, NAR Chief Economist Lawrence Yun noted that “despite the small monthly gain on a seasonally adjusted basis, August and September marked the two slowest months for home sales this year.”

The housing market had already been deteriorating ahead of Wednesday's data. As pending home sales dropped to a near-12-year low in September, brokerage Redfin reported that September contract signings tumbled 4% versus the prior month, representing the sharpest single-month drop in over three years. Every one of the 50 major U.S. metros Redfin tracks recorded a decline, a sweep last seen in September 2023 when mortgage rates similarly exceeded 7% for a sustained period.

The rate climb has been relentless since midsummer. As rates reached 7.49% the week prior, the 30-year fixed had posted seven straight weekly increases, rising roughly half a percentage point over just three weeks — the steepest such advance since early 2023. Before that surge, rates had crossed above 7% for the first time since May 2024 in the week ended September 18.