A “For Sale” sign outside a home in Marana, Arizona, USA on Wednesday, August 5, 2026.
Rebecca Noble | Bloomberg | Getty Images
Mortgage rates rose again last week, prompting more borrowers to look to save. They found that trend was seen in riskier adjustable-rate mortgages (ARMs).
Demand for these loans last week accounted for 8.5% of all mortgage applications, up from 8% the week before and the highest level since June, according to the Mortgage Bankers Association. During the first few years of the pandemic, when mortgage rates fell to historic lows, demand for ARMs was just 3%.
ARMs are cheaper and can be locked in for up to 10 years. For comparison, the average contract interest rate last week for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less increased to 6.85% from 6.79% the previous week, and for loans with 20% down payments, the points increased from 0.65 to 0.67, including origination fees. The average five-year ARM interest rate fell from 5.94% to 5.82%.
Overall demand for home loans has fallen again due to the rise in 30-year fixed interest rates. According to MBA’s seasonally adjusted index, total filings fell 2.7% this week.
“Mortgage rates rose last week due to investors’ continued concerns about inflation and the federal budget deficit. The 30-year fixed rate rose to 6.85%, the highest level since June 2025 and 36 basis points higher than a year ago,” said Joel Kang, MBA vice president and deputy chief economist.
The biggest drop was in mortgage refinance applications, which fell 6% for the week and 25% compared to the same week last year. This is the slowest pace since May 2025.
The number of applications for mortgages to buy homes was almost flat, down 0.2% for the week. That was 4% higher than the same week a year ago.
“Despite increasing housing inventory in many markets, rising mortgage rates continue to weigh on prospective homebuyers considering taking action,” Kang added.
Mortgage rates were held steady this week, according to a separate Mortgage News Daily poll. Investors are awaiting the release of monthly inflation data this weekend. Depending on the outcome, these could significantly move mortgage interest rates in either direction.
