Authored by Andrew Moran via The Epoch Times,
Higher interest rates pushed prospective homebuyers toward riskier mortgages last week, new industry data show.
The total volume of mortgage applications declined almost 2 percent for the week ending Sept. 18, according to a report released by the Mortgage Bankers Association on Sept. 23. This represented the third consecutive weekly drop.
Applications for a mortgage to purchase a home fell 1 percent and were down 11 percent from the same time a year ago. Refinancing applications also fell to their lowest levels since February 2025, down 3 percent monthly, and were 62 percent lower year over year.
"Applications for both refinance and purchase loans declined further last week, noting that the comparison is to the week that included the Labor Day holiday," Mike Fratantoni, the group's senior vice president and chief economist, said in a news release.
Last week's decline aligned with the sharp increase in interest rates.
Because fixed-rate mortgage costs have accelerated in recent weeks, borrowers sought riskier adjustable-rate mortgages - also known as ARMs - Fratantoni added.
"With fixed rates much higher, more borrowers opted for ARMs, with the ARM share reaching 9.8%, as rates for 5/1 ARMs were more than a percentage point lower than those for fixed rate loans," he said in a statement.
The average contract interest rate for 30-year fixed-rate mortgages rose
