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Rising Rates Weigh on Mortgage Activity – Eye On Housing

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Mortgage application activity decreased month-over-month as the 30-year fixed mortgage rate rose. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, declined 4.3% from February on a seasonally adjusted basis but remained 30.8% higher than a year earlier. Applications for adjustable-rate mortgages (ARM) also decreased 4.5% month-over-month, while their share of total applications was unchanged at 8.3%.

The average contract rate for a 30-year fixed-rate mortgage increased 13 basis points (bps) to 6.37%, setting back the improvement seen over the last five months. Nonetheless, the rate remained 33 bps lower than its level a year ago. The increase in mortgage rates diminished refinance activity, which fell 11.4%. Purchase applications, on the other hand, increased 6.4%, driven by growth in both FHA and VA segments. Relative to March 2025, refinance and purchase activities were up 60.4% and 6.4%, respectively.

By loan type, applications for both adjustable-rate mortgages (ARMs) and fixed-rate mortgages (FRMs) both decreased 4.5% month-over-month. On a year-over-year basis, FRM applications were up 28.6%, while ARM applications rose 62.4%. As of March 2026, ARMs applications–including both purchase and refinance loans–accounted for 8.3% of total applications on a non-seasonally adjusted basis, unchanged from last month and 1.6 percentage points higher than a year earlier. The average contract interest rate for 5/1 ARMs was 5.6% in March.

Loan sizes declined across all categories except purchase loans in March, pulling the overall average loan size down 3.3% to $401,300. The average purchase loan size rose 1.0% to $450,800, while the average refinance loan size fell 10.4% to $351,000. The average ARM loan size declined 4.0% to $929,500.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Iran Conflict Reverses Decline in Mortgage Rates – Eye On Housing

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Mortgage rates, which dipped below 6% in February, climbed back up to end the month just under 6.4%. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.18% in March, 13 points (bps) higher than February. The average 15-year rate also increased by the same amount to 5.56%. Despite the recent increase, both rates remain lower than a year ago by 47 bps and 27 bps, respectively.

The rebound in mortgage rates was driven primarily by movements in the 10-year Treasury yield, which jumped 11 bps to 4.24% as tensions in the Middle East escalated. The ongoing Iran conflict has disrupted oil markets, pushing oil prices higher and reigniting fears that inflation could pick up again.

Amid this uncertainty, the Federal Reserve held the federal funds rates unchanged at 3.5% to 3.75%. They revised their inflation expectations higher from 2.4% last December to 2.7% but maintained that one rate cut is still possible in 2026.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Lower Mortgage Rates Boost Refinancing While Purchase Activity Slows – Eye On Housing

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Mortgage application activity increased month-over-month as the 30-year fixed mortgage rates reached a three-year low. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, increased 1.5% from January on a seasonally adjusted basis and was 56.3% higher than a year earlier.  The data also indicated a rising adjustable-rate mortgage (ARM) share, increasing from 5.7% of mortgages to 8.3% over the past year.

The average contract interest rate for 30-year fixed mortgage rates declined a further seven basis points (bps) to 6.14%, tracking the decline in the 10-year treasury yield. Compared with February 2025, the 30-year fixed mortgage rate was 73 bps lower. The decline in mortgage rates supported the continued strength in refinancing activity, which increased 11.3%. On the other hand, purchase applications decreased 12.3% as tight existing-home inventory and winter storms dampened home-buying activity. Relative to February 2025, refinance and purchase activities are up 121.1% and 9.0%, respectively.

By loan type, applications for adjustable-rate mortgages (ARMs) increased 18.0% month-over-month while fixed-rate mortgages (FRMs) held steady. On a year-over-year basis, FRM applications were up 51.8%, while ARM applications more than doubled, rising 129.9%. As of February 2026, ARMs accounted for an average of 8.3% of total applications on a non-seasonally adjusted basis, up 1.2 percentage points from January and 2.6 percentage points higher than a year earlier.

Loan sizes across all loan types increased in February with the total market increasing by 3.2% to $414,800. Average purchase loan sizes increased 2.5% to $446,300, while the refinance loan size increased by 3.7% to $391,800. The average ARM loan size climbed 4.6% to $968,300.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Mortgage Rates Dipped Below 6% in February Amid Treasury Rally – Eye On Housing

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Mortgage rates continued to decline in February, dipping below 6% in the last week of February. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.05% last month, 5 basis points (bps) lower than January. Meanwhile, the average 15-year rate declined only a basis point to 5.43%. Compared to a year ago, the 30-year and 15-year rates are lower by 79 bps and 60 bps, respectively.

The 10-year Treasury yield, a key benchmark for long-term borrowing, held relatively steady for most of February with an average 4.18% – a marginal decrease of 2 bps from the previous month. However, yields fell significantly in the final week of February as investors moved to secure U.S. Treasuries amid rising risk aversion in corporate credit markets, widening the spread between corporate bond yields and U.S. Treasuries. Investor concerns centered on the large capital expenditures by major technology firms to finance artificial intelligence infrastructure, much of which has been funded through corporate bond issuance, contributing to rising debt levels among these “hyperscalers”.

Following the recent escalation of conflict in the Middle East, the 10-year Treasury yield has shown signs of reversing course. Investors are closely monitoring how protracted the conflict may become and its potential implications for global energy markets. If oil prices rise significantly or remain elevated, inflation pressures could intensify, potentially pushing Treasury yields higher.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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A 25-Basis-Point Decline in the Mortgage Rate Prices-In 1.42 Million Households – Eye On

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Housing affordability remains a critical challenge nationwide, and mortgage rates continue to play a central role in shaping homebuying power. Although rates have declined from the recent peak of about 7.6% in 2023 to around 6.01% as of February 19,2026, they remain elevated relative to typical levels in the 2010s. During that decade, mortgage rates generally ranged between 4% and 5%. They also remain well above the historic lows reached during the pandemic. Even modest declines in mortgage rates can have a significant impact on housing affordability, pricing more households back into the market. New NAHB Priced-Out Estimates illustrate how changes in interest rates affect the number of households that can afford a median-priced new home.

At the beginning of 2026, with the average 30-year fixed mortgage rate at 6.25%, around 31.5 million households could afford a median-priced new home at $413,595. This requires a household income of $124,336 by the front-end underwriting standards. A modest 25 basis-point rate reduction from 6.25% to 6% would lower the qualifying income threshold sufficiently to allow 1.42 million additional households to afford a median-priced new home in 2026.

This sizable affordability response reflects the underlying distribution of U.S. household incomes. Household incomes are heavily concentrated in the middle of the distribution, with many households near key affordability thresholds. Approximately 79.8 million households earn less than $105,880, and an additional 14 million households earn between $105,881 and $132,350. When mortgage rates decline, the qualifying minimum income shifts downward into these densely populated income ranges, bringing a substantial number of households into the market.

In contrast, an equivalent 25 basis-point cut at higher interest rate levels has a smaller impact on affordability. For example, a decline from 7.75% to 7.5% would only price around 1 million households into the market. At higher rate levels, fewer households remain near the margin of qualification.

Overall, the estimates demonstrate that modest mortgage rate relief at current levels can translate into significant gains in housing affordability, highlighting the importance of mortgage interest rates for prospective homebuyers and the housing market.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Lower Rates Lift Mortgage Activity at Start of the Year – Eye On Housing

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Mortgage application activity rose sharply in January, driven primarily by a surge in refinancing activity as mortgage rates declined to a new low. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, increased 12.9% from December on a seasonally adjusted basis and was 61.3% higher than a year earlier.

The average contract interest rate for 30-year fixed mortgages dropped 13 basis points (bps) to 6.2% following the announcement of $200 billion in mortgage-backed securities (MBS) buybacks by the GSEs. Compared with January 2025, the 30-year fixed mortgage rate was 81 bps lower. The decline in rates supported month-over-month gains in both purchase and refinance activity. Purchase applications increased 2.9%, while refinance applications surged 19.8%. Relative to January 2025, purchase activity increased 16.2%, while refinance applications jumped 143.8%.

By loan type, applications for fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs) increased 12.9% and 7.9% month-over-month, respectively. On a year-over-year basis, FRM applications were up 57.8%, while ARM applications more than doubled, rising 113.1%. As of January 2026, ARMs accounted for an average of 7.1% of total applications on a non-seasonally adjusted basis, down 0.4 percentage points from December but 1.7 percentage points higher than a year earlier.

For loan sizes, the average loan amount across the total market increased by 1.1% to $402,000. Average purchase loan sizes increased 2.5% to $435,400, while the refinance loan size increased modestly by 0.2% to $378,000. In contrast, the average ARM loan size continued to decline, falling 4.4% to $925,600.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Mortgage Rates Declined Despite Higher Treasury Yields – Eye On Housing

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Long-term mortgage rates continued to decline in January. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.10% last month, 9 basis points (bps) lower than December. Meanwhile, the 15-year rate declined 4 bps to 5.44%. Compared to a year ago, the 30-year rate is lower by 86 bps. The 15-year rate is also lower by 72 bps.

The 10-year Treasury yield, a key benchmark for long-term borrowing, averaged 4.20% in January – an increase of 8 bps from the previous month, but remained considerably lower than last year by 43 bps. While mortgage rates typically move in tandem with the treasury yields, the spread between the two narrowed during the month. Reports that the Trump administration encouraged Fannie Mae and Freddie Mac to expand purchases of mortgage-backed securities (MBS) boosted demand for MBS, pushing mortgage rates lower.

However, treasury yields rose sharply in the final week of January from global and fiscal pressures. The impact of the rift with Europe and the broader reduction of international purchases of U.S. Treasuries has left a measurable impact on U.S. interest rates. The 10-year Treasury rate at the beginning of 2026 was at 4.11%. That rate has now increased to 4.26%. This unfortunately means the beneficial impact of the $200 billion of additional acquisition of Fannie Mae and Freddie Mac MBS by those GSEs has been partially offset by international concerns.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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December Mortgage Activity Softens Even as Rates Ease – Eye On Housing

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Mortgage application activity declined in December despite a modest easing in mortgage rates. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, fell 5.3% from November on a seasonally adjusted basis, though it remained 47.1% higher than a year ago.

The average contract interest rate for 30-year fixed mortgages edged down 2 basis points to 6.3%, the lowest level of 2025. Nonetheless, both purchase and refinance applications declined month-over-month, down 1.6% and 5.3%, respectively. Relative to December 2024, purchase activity increased 16.8%, while refinance applications were up 98.6%.

By loan type, applications for both fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs) declined from November, decreasing 4.8% and 13.6%, respectively. On a year-over-year basis, FRM applications were up by 43.9%, while ARM applications have more than doubled, rising 105.1%. As of December 2025, ARMs accounted for an average 7.5% of total applications on a non-seasonally adjusted basis, down 0.3 percentage points from November but 2.2 percentage points higher than a year earlier.

For loan sizes, the average loan amount across all loan types increased marginally by 0.6% to $397,500. Average purchase loan sizes declined 0.8% to $424,800, while the refinance loan size increased 2.5% to $377,300. The average size of ARM loans edged down 0.1% to $968,000.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Mortgage Rates End 2025 at the Lowest Level of the Year – Eye On Housing

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Long-term mortgage rates have been declining since mid- 2025 and ended the year at their lowest level since September 2024. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.19% in December, 5 basis points (bps) lower than November. Meanwhile, the 15-year rate declined 3 bps to 5.48%. Compared to a year ago, the 30-year rate is lower by about half a percentage point, or 53 basis points (bps). The 15-year rate is also lower by 45 bps.

The 10-year Treasury yield, a key benchmark for long-term borrowing, averaged 4.12% in December – a modest increase of 2 bps from the previous month. Given forward-looking markets, the 10-year Treasury yield declined during the week preceding the Federal Reserve’s third rate cut of the year. However, compared to the prior month, yields ended slightly higher, rising 2 bps, as labor market data released shortly thereafter pointed to slowing job gains and rising unemployment rate.

Falling lower mortgage rates have started to translate into gains as existing home sales edged up slightly in November. However, this increase remains limited as mortgage rates above 6% are still considered elevated. Nonetheless, as financing costs continue decline, more households are likely to reenter the housing market. An NAHB analysis shows that a 25 bps reduction in the 30-year mortgage rate, from 6.25% to 6.00%, could bring approximately 1.1 million additional households back into the buyer pool.

NAHB expects the 30-year mortgage rate to average 6.17% in 2026 and would reach 6% by 2027.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Top Posts – Lower Mortgage Rates, Better Affordability – Eye On Housing

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As housing affordability remains a critical challenge across the country, mortgage rates continue to play a central role in shaping homebuying power. Mortgage rates stayed elevated throughout 2023 and early 2024. Recent data, however, shows a modest decline in mortgage rates. Even slight declines can have a significant impact on housing affordability, pricing more households back into the market. New NAHB Priced-Out Estimates show how home price increases affect housing affordability in 2025. This post presents details regarding how interest rates affect the number of households that can afford a median priced new home.

At the beginning of 2025, with the average 30-year fixed mortgage rate at 7%, around 31.5 million households could afford a median-priced home at $459,826. This requires a household income of $147,433 by the front-end underwriting standards[1]. In contrast, if the average mortgage rates had remained at the recent peak of 7.62% in October 2023, only 28.7 million households would have qualified. This 62-basis point decline has effectively priced 2.8 million additional households into the market, expanding homeownership opportunities.

The table below shows how affordability changes with each 25 basis-point increase in interest rates, from 3.75% to 8.25% for a median-priced home at $459,826. The minimum required income with a 3.75% mortgage rate is $110,270. In contrast, a mortgage rate of 8.25%, increases the required income to $163,068, pushing millions of households out of the market.

As rates climb higher, the priced-out effect diminishes. When interest rates increase from 6.5% to 6.75%, around 1.13 million households are priced out of the market, unable to meet the higher income threshold required to afford the increased monthly payments. However, an increase from 7.75% to 8% would squeeze about 850,000 households out of the market.

This exemplifies that when interest rates are relatively low, a 25 basis-point increase has a much larger impact. It is because it affects a broader portion of households in the middle of the income distribution. For example, if the mortgage interest rate decreases from 5.25% to 5%, around 1.5 million more households will qualify the mortgage for the new homes at the median price of $459,826. This indicates lower interest rates can unlock homeownership opportunities for a substantial number of households.

[1] . The sum of monthly payment, including the principal amount, loan interest, property tax, homeowners’ property and private mortgage insurance premiums (PITI), is no more than 28 percent of monthly gross household income.



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