Mortgage rates have climbed above 7%, adding fresh strain on Americans trying to buy or refinance a home, while refinance applications sank to their slowest pace since February 2025.
The figures come from the Mortgage Bankers Association’s weekly survey, as reported by WRAL. Overall mortgage applications fell 1.5% from the previous week, per the MBA, while refinance applications dropped 3% week-over-week and are now down a striking 62% compared with the same time last year. Higher rates, WRAL notes, can tack on hundreds of dollars to a homebuyer’s monthly payment, pricing out households already stretched thin.
Why Rates Broke Through the 7% Mark
Freddie Mac’s own Primary Mortgage Market Survey, released a few days earlier, showed the 30-year fixed rate averaging 6.95% — up 69 basis points from 6.26% a year earlier — with the 15-year fixed rate at 6.26%, according to Freddie Mac. The uptick follows the Federal Reserve’s September 16 decision to raise the target federal funds rate by 25 basis points to a range of 3.75% to 4.00%, as detailed by the Federal Reserve.
The central bank does not directly set mortgage rates, but its decisions can influence bond markets, and the 10-year Treasury yield in turn affects what lenders charge borrowers, WRAL’s report explains. Persistent inflation worries and elevated oil prices have also contributed to the run-up in borrowing costs, WRAL reports.
Home Sales Keep Sliding as Inventory Piles Up
Sales of previously occupied homes have declined for three consecutive months, the station’s report notes.
Locally, the picture looks somewhat different. In Wake County, N.C., the median single-family home sale price stood at roughly $460,000 in August, with Raleigh closer to $450,000, down about 5% year-over-year as inventory expanded, according to Triangle MLS data reported by Sold Zero Commission. That cooling comes amid continued growth in the Triangle suburbs, a boom that had helped keep local housing supply tight for years.
Buyers Weigh Their Options as ARMs Gain Ground
With fixed rates elevated, more borrowers are turning to adjustable-rate mortgages to reduce their initial payments. Adjustable-rate mortgage applications now account for nearly 10% of the mortgage market, per the MBA.
Tom Finigan, a local real estate agent, told WRAL that buyers may be able to reduce costs. Refinancing remains an option for existing homeowners, WRAL’s report adds, though rates would need to fall further before that option becomes more attractive for many borrowers.
The Affordability Gap Widens
The squeeze on buyers extends beyond monthly payments. Mortgage rates have varied over time, putting today’s 7% threshold in longer-term perspective.
