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US Mortgage Rates Soar Above 7%, Highest Since May 2024, Dampening Housing Market
M
Moneycontrol•23-09-2026, 16:57
US Mortgage Rates Soar Above 7%, Highest Since May 2024, Dampening Housing Market
- •The contract rate on a 30-year fixed mortgage increased by 15 basis points to 7.12% in the week ended September 18, marking the highest level since May 2024.
- •Rising mortgage rates, trending upwards since February due to inflation concerns and the Iran war, are further suppressing a housing market already challenged by elevated prices and sluggish sales.
- •The Mortgage Bankers Association (MBA) reported a 0.8% drop in its purchase index and a 2.6% decline in its refinance index, indicating fewer Americans are applying for home financing.
- •Economists like Daryl Fairweather of Redfin and Ben Ayers of Nationwide suggest that while the 7% psychological barrier will dampen demand, the housing market may be nearing its bottom.
- •Despite the current downturn, factors like marriages, divorces, and job moves are expected to sustain some market activity, preventing a complete collapse in demand.
Key Questions Answered
The contract rate on a 30-year fixed mortgage rose 15 basis points to 7.12% in the week ended September 18, reaching its highest level since May 2024.
Fewer Americans are applying for home financing as borrowing costs climb, with the MBA purchase index falling to a four-week low and the refinance index dropping to its lowest level since February 2025.
Rates have been trending up since the start of the Iran war in February, which drove energy prices higher and rekindled inflation concerns, alongside the Federal Reserve raising its benchmark interest rate.
