Current mortgage rates surge above 7% as refinance rates leave homeowners stuck

Current mortgage rates climbed to their highest level in more than two years this week, with the 30-year fixed mortgage rising 15 basis points to 7.12% in the week ended September 18.

The Mortgage Bankers Association data indicates it is the highest since May 2024 and adds further pressure on an already struggling housing market.

The surge in borrowing costs has hit refinance rates and demand hard. Applications to refinance a home loan decreased by 3% for the week and are reported to be 62% lower than the same week one year ago (the lowest level since February 2025).

A year ago, the 30-year fixed rate was 78 basis points lower, leaving few homeowners with an incentive to refinance. Purchase mortgage applications also fell 1% week-over-week and 11% year-over-year as the fall housing season gets underway.

With current mortgage rates well above 7%, more borrowers are turning to adjustable-rate mortgages. The ARM share of applications jumped to 9.8% from 8.4% the prior week, as rates for 5/1 ARMs were more than a percentage point lower than fixed-rate loans.

At the same time, the five-year adjustable rate mortgage fell 14 basis points to 6.1%. Mortgage rates moved slightly lower to start this week as oil prices and bond yields retreated. However, with current mortgage rates hovering above 7% and refinance rates offering little relief, affordability challenges persist for American homeowners and buyers alike.