US mortgage rates rose last week to the highest level in a year, curbing demand for home loans in an already subdued housing market, according to the latest MBA survey.
The 30-year mortgage contract rate increased by 5 basis points to 6.81% in the week ending July 31, based on data from the Mortgage Bankers Association released on Wednesday.
Rates dropped to their lowest levels since 2022 toward the end of February, right before the start of the Iran war. Since then, they’ve moved higher as the conflict increased energy prices and raised inflation worries.
MBA’s purchase index, reflecting loan applications, decreased by 3.6% week-over-week to a five-month low, while its refinancing index dropped 1.9%, reaching the lowest level since mid-2025.
Last week, the Federal Reserve added uncertainty for borrowers. While it kept its benchmark interest rate unchanged, as anticipated, Chairman Kevin Warsh’s post-meeting remarks sparked worries about the Fed’s dedication to the 2% inflation target. Consequently, bond yields rose as investors reacted.
Mortgage rates tend to follow the yield on 10-year Treasury notes, which at the end of July reached their highest point since early 2025.
By CEO NA Editorial Staff
