Analysis
Higher borrowing costs are showing up in fewer applications to buy homes and in more borrowers choosing adjustable-rate loans to lower their starting payments. The rise follows the recent climb in long-term Treasury yields, which mortgage rates tend to track, and comes on the same day that a gasoline-driven rise in consumer prices kept attention on interest rates.
What the survey showed
The Mortgage Bankers Association said its index of mortgage application volume fell 2.7% on a seasonally adjusted basis in the week ended October 9, 2026 [1]. The seasonally adjusted purchase index fell 4% from the week before, and the unadjusted purchase index was 16% lower than a year earlier [1]. The refinance index slipped 0.4% for the week and was 56% below a year earlier [1].
The average contract rate on 30-year fixed-rate loans with conforming balances ($832,750 or less) rose to 7.50% from 7.49% [1]. Rates also rose for jumbo loans, to 7.49% from 7.39%; for FHA-backed loans, to 7.19% from 7.14%; for 15-year fixed loans, to 6.87% from 6.71%; and for 5/1 adjustable-rate loans, to 6.54% from 6.43% [1].
| Loan type | Rate, week ended Oct. 9 | Previous week |
|---|---|---|
| 30-year fixed, conforming | 7.50% | 7.49% |
| 30-year fixed, jumbo | 7.49% | 7.39% |
| 30-year fixed, FHA | 7.19% | 7.14% |
| 15-year fixed | 6.87% | 6.71% |
| 5/1 adjustable | 6.54% | 6.43% |
Borrowers turn to adjustable-rate loans
"The 30-year fixed rate was 7.5 percent, the highest rate since November 2023 and more than a percentage point higher than a year ago," said Joel Kan, the association's deputy chief economist [1]. He said borrowers are relying more on adjustable-rate loans to lower monthly payments: their share of applications rose to 10.5%, the highest since October 2025 [1]. The drop in refinancing was driven mainly by a 5% fall in FHA refinance applications, he said [1].
What remains uncertain
The survey covers applications through retail and consumer-direct lending channels, not every mortgage in the country, and weekly figures can be volatile. Rates quoted are averages for loans with 80% loan-to-value ratios and include points; individual borrowers' rates vary.