A “For Sale” sign outside a home in Marana, Arizona, USA on Wednesday, August 5, 2026.
Rebecca Noble | Bloomberg | Getty Images
Mortgage rates rose further last week, weakening demand for loans again.
Total mortgage applications fell 1% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance of up to $832,750, including origination fees for loans with a 20% down payment, increased by 0.65 points to 0.66 points and rose to 6.78% last week from 6.77% the previous week. This was the highest level in three weeks.
Mortgage refinance applications, which are most sensitive to weekly interest rate movements, fell 2% for the week. That’s 17% lower than the same week a year ago, when interest rates were 9 basis points lower.
“Refinance applications declined, particularly for FHA and VA loans, and the average loan size for refinances was at its lowest level since June 2025,” Joel Kang, MBA vice provost and deputy chief economist, said in a release.
The number of mortgage loan applications decreased by 0.3% for the week, and was down 5% from the same week last year.
Another report from Realtor.com says fewer buyers are going all-cash, even though interest rates are higher than last year. When there is less competition in the overall market, sellers are more likely to accept buyers who need financing.
“Purchasing activity has slowed over the past week as FHA applications have declined by 7%. The purchasing market has also slowed over the past two months,” Kang added.
Mortgage rates are lower this week, with falling oil prices pushing rates lower on Tuesday, according to a separate Mortgage News Daily survey.
“Reports suggested that the peace process was progressing through Pakistani intermediaries. In response, oil prices plummeted and bond yields followed suit. Bond yields are correlated with mortgage rates,” said Matthew Graham, chief operating officer at Mortgage News Daily.
