The interest rate on the nation’s most popular home loan climbed again last week, adding pressure on prospective homebuyers and driving down the number of applications.
The Mortgage Bankers Association on Wednesday reported that the average contract interest rate on a 30-year fixed mortgage rose to 6.57 percent in the week ended March 27, up 14 basis points from one week earlier.
Over the past four weeks, the rate has jumped by nearly half a percentage point, the sharpest increase since 2024, the MBA said. The figure comes from the national group’s weekly applications survey, which tracks rates tied to submitted mortgage applications reported by lenders.
Higher rates weighed on borrowing activity. The MBA said refinancing applications fell 17.3 percent from the previous week, while applications to purchase a home slipped 3 percent.
“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,” Mike Fratantoni, the MBA’s senior vice president and chief economist, said in a statement.
According to Fratantoni, purchase applications for Federal Housing Administration and Veterans Affairs loans were holding up better than those for conventional loans. However, he said the recent jump in rates and broader economic uncertainty were likely weighing on buyer confidence.
Freddie Mac, which uses a different survey methodology, reported that the average 30-year fixed-rate mortgage stood at 6.38 percent in the week ending March 26, up from 6.22 percent a week prior. Freddie Mac says its weekly figure reflects rates offered to borrowers on standard prime conforming home-purchase loans.
Mortgage rates tend to move with the yield on the 10-year U.S. Treasury note, a benchmark that reflects market expectations for growth, inflation, and interest rates over the medium term, during which the mortgage has to be repaid. The 10-year yield stood at about 4.32 percent late Tuesday, still up roughly 35 basis points on the month despite retreating over the previous two trading sessions.
That rise in yields came alongside a surge in oil prices after the U.S.–Israeli war in Iran severely disrupted shipping through the Strait of Hormuz, through which about one-fifth of the world’s oil and liquefied natural gas trade normally passes. Fears of Iranian attacks prompted many ship operators to stop or reduce traffic through that waterway, pushing up global energy costs.