Adobe Stock

Higher mortgage rates and rising prices contributed to lower mortgage application activity in the past week.

After oscillating between 6.6% and 6.7%, the average 30-year fixed rate mortgage increased to 6.77% as of Feb. 15, according to the Freddie Mac Primary Mortgage Market Survey. At the same time, data from Redfin suggests the median home price increased 6.1% for the four weeks ending Feb. 11, the largest increase since October 2022.

Amid rising rates, the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey suggests applications for mortgages decreased 2.3% from the previous week for the week ending Feb. 9.

“On the heels of consumer prices rising more than expected, mortgage rates increased this week,” Freddie Mac chief economist Sam Khater says. “The economy has been performing well so far this year, and rates may stay higher for longer, potentially slowing the spring home buying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier.”

According to the MBA, the seasonally adjusted mortgage purchase index decreased 3% from the previous week. The unadjusted purchase index increased 4% from the previous week but was 12% lower than a year ago. Refinance activity was lower on a week-over-week basis but higher than a year ago.

“Application activity was weaker last week, as mortgage rates moved higher across the board,” says Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications remained subdued as elevated rates continue to add affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago.”

The refinance share of mortgage activity decreased to 34.2% of total applications from 35.4% the prior week. The adjustable-rate mortgage share of activity increased to 7% of total applications.

Keep the conversation going—sign up to our newsletter for exclusive content and updates. Sign up for free.