Rising borrowing costs dampen homebuying and refinancing activity amid broader economic pressures.
By yourNEWS Media Newsroom
Mortgage borrowing activity declined across the United States as interest rates on home loans moved higher, adding pressure on prospective buyers and those seeking to refinance, according to new industry data.
The Mortgage Bankers Association reported that the average rate for a 30-year fixed mortgage rose to 6.57 percent for the week ending March 27, increasing by 14 basis points from the prior week. Over the past month, rates have climbed by nearly half a percentage point, marking the most rapid increase since 2024.
As borrowing costs increased, application volumes declined. Refinancing activity dropped 17.3 percent compared to the previous week, while applications for home purchases fell 3 percent.
Mike Fratantoni said that while higher rates are weighing on demand, some market conditions are providing limited offset.
“The headwinds of higher rates are being offset somewhat by the buyer’s market in many parts of the country—there are more homes for sale than buyers have seen in some time,” Fratantoni said.
He noted that applications backed by government programs, including Federal Housing Administration and Veterans Affairs loans, showed greater resilience than conventional mortgages. However, he said the recent increase in rates, combined with broader economic uncertainty, is likely affecting buyer sentiment.
Separate data from Freddie Mac showed a slightly lower average rate, reporting 6.38 percent for a 30-year fixed mortgage in the week ending March 26, up from 6.22 percent the previous week. The organization’s figures are based on rates offered to borrowers with strong credit profiles for standard home-purchase loans.
Mortgage rates typically track movements in the 10-year U.S. Treasury yield, a benchmark influenced by expectations around inflation, economic growth, and future interest rate policy. The yield stood near 4.32 percent late Tuesday, reflecting an increase of roughly 35 basis points over the past month despite a slight pullback in recent trading sessions.
Rising yields have coincided with volatility in global energy markets. Oil prices surged following disruptions to shipping in the Strait of Hormuz during the ongoing conflict involving Iran, affecting a key route for global energy supplies. Brent crude prices briefly exceeded $115 per barrel earlier in the week before easing to approximately $102 as markets reacted to indications that tensions could de-escalate.
The combined impact of higher borrowing costs and economic uncertainty continues to influence housing market activity, with lenders and policymakers monitoring trends in both rates and application volumes.
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