Mortgage rates extended their recent climb last week, reaching their highest level in nearly a year, but homebuyers showed renewed interest in the market as they encountered reduced competition and more willing sellers.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less increased to 6.69% from 6.65%, according to the Mortgage Bankers Association’s seasonally adjusted index. Points decreased to 0.62 from 0.67, including the origination fee, for loans with a 20% down payment. The rate marked the highest level since last August.
Total mortgage demand rose 1.9% for the week compared with the previous week, driven primarily by purchase activity rather than refinancing. Applications for a mortgage to purchase a home climbed 6% for the week and were 0.2% higher year over year, essentially flat but showing resilience despite the rate environment.
Refinancing Activity Pulls Back
Refinance demand, which responds more sharply to weekly rate movements, fell 2% for the week. The volume remained just 7% higher than the same week one year ago, when the average 30-year fixed rate was only 15 basis points higher.
“Growing home inventory in many markets is supporting more purchase activity,” said Mike Fratantoni, senior vice president and chief economist at the MBA. “Incoming data showed that inflation dropped in June, but with oil prices spiking again, that improvement seems unlikely to continue in July data, and mortgage rates are likely to remain higher as a result.”
Summer Slowdown Brings Relief
Potential buyers are finding some relief as the market settles into its historically slower summer months. Real estate agents participating in CNBC’s Housing Market Survey reported that sellers appear more willing to negotiate on price, providing an opening for buyers who have faced tight inventory and stiff competition in recent months.
Mortgage rates moved even higher at the start of this week, matching their previous high from mid-May, according to a separate survey from Mortgage News Daily. New escalations in the conflict with Iran overshadowed last week’s cooler-than-expected inflation reports.
According to Matthew Graham, chief operating officer at Mortgage News Daily, fuel prices largely explain the recent rate movement. August gasoline futures hit their May 19 highs this week, perfectly aligning with the round trip in mortgage rates.
The trajectory suggests mortgage rates may remain elevated in the near term as geopolitical tensions and commodity prices continue to influence broader financial markets, potentially tempering the spring homebuying season’s momentum as summer progresses.
Source: www.cnbc.com — https://www.cnbc.com/2026/07/22/mortgage-rates-are-rising-again.html
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