Weekly Mortgage Applications Fall as Key 30-Year Rate Reaches Highest Since May 2024

03:14 PM EDT, 09/23/2026 (MT Newswires) -- Mortgage applications in the US fell last week as a key 30-year rate crossed 7% to reach the highest level in more than two years, potentially worsening ongoing affordability challenges. The Mortgage Bankers Association's market composite index, which measures loan application volume, decreased 1.5% sequentially in the week through Sept. 18, the association said Wednesday. The latest data include an adjustment for the Labor Day holiday, according to the MBA. The average interest rate for the key 30-year fixed mortgages with conforming loan balances of $832,750 or less jumped to 7.12% from 6.97% a week ago. The latest reading marked the highest since May 2024, according to MBA Chief Economist Mike Fratantoni. "With fixed rates much higher, more borrowers opted for (adjustable-rate mortgages, or ARMs), with the ARM share reaching 9.8%," Fratantoni said. For loan balances higher than $832,750, the mortgage rate climbed to 7.15% from 7.03%. For 15-year loans, the rate increased to 6.43% from 6.30% week to week, according to the report. Late Tuesday, homebuilder KB Home (KBH) cut its full-year housing gross profit margin estimates amid weaker market conditions and affordability pressures. Last week, rival Lennar (LEN) reported weaker-than-expected fiscal third-quarter results as affordability challenges slowed home-buying activity. Earlier in the month, the National Association of Home Builders and Wells Fargo said US homebuilder confidence this month hit its lowest level since September 2025 amid elevated mortgage rates and increasing material costs. Separately, the NAR said US existing home sales last month hit the lowest level since June 2025 amid persistent affordability headwinds. In a separate report published Wednesday, S&P Global (SPGI) said US private-sector output growth accelerated to a 62-month high in September, while price pressures intensified. The odds that the Federal Reserve will raise its benchmark lending rate by 25 basis points next month jumped to 69% Wednesday from 55% Tuesday, according to the CME FedWatch tool. The probability of interest rates remaining unchanged fell to 31% from 45%. Last week, the US central bank tightened its monetary policy by 25 basis points to combat sticky inflation, its first rate increase since 2023, while signaling another hike later this year. The refinance index fell 3% sequentially and 62% annually last week, the MBA report showed Wednesday. The refinancing pace fell to its slowest pace since February 2025, Fratantoni said. The seasonally adjusted purchase index dropped 1% week on week, according to the MBA. Price: 47.05, Change: -1.54, Percent Change: -3.17