Mortgage rates in the U.S. have inched higher for the second straight week, putting a damper on refinancing activity even as rates remain near the lowest levels of 2025. According to Freddie Mac, the average 30-year fixed-rate mortgage reached 6.34% this week through Wednesday, up from 6.30% a week earlier. The average 15-year fixed-rate mortgage similarly ticked up to 5.55% from 5.49%. While these rates are historically low relative to the past decade, the upward movement has effectively ended the brief wave of refinancing that had been fueling mortgage activity over recent months.
The recent rise in rates comes in the wake of the Federal Reserve’s benchmark interest rate cut last month, as investors remain uncertain about the pace and magnitude of future rate reductions. Mortgage rates typically track the 10-year Treasury yield, which has hovered near 4.1% in recent days, though its movement has been volatile amid concerns over the potential economic fallout from the ongoing government shutdown. Adding to the uncertainty, economic data that often influence mortgage rates, including the monthly nonfarm payrolls report, has been delayed, leaving markets without some of the key indicators used to gauge economic momentum. Notably, ADP’s recent report showed that private employers cut 32,000 jobs in September, weaker than consensus expectations, further contributing to investor caution.
The rising rates have had a tangible impact on borrower behavior. Refinancing applications fell by 21% through Friday compared with the prior week, according to the Mortgage Bankers Association (MBA), while total mortgage applications declined slightly by 1% week over week. “An increase in mortgage rates cooled borrower demand during the last full week of September,” said Bob Broeksmit, president and CEO of the MBA. “Although purchase applications continue to track above year-ago levels because of lower rates, economic uncertainty and affordability challenges continue to hold back home sales.”
Despite the slowdown in refinancing, purchase activity remains relatively resilient, supported by rates that are still favorable compared with historical averages. However, analysts caution that ongoing economic uncertainty, coupled with rising rates, could continue to limit homebuying activity and keep the housing market under pressure in the near term. The situation highlights the delicate balance between monetary policy, Treasury yields, and consumer behavior in the U.S. mortgage market, as lenders and borrowers alike navigate a period of unprecedented economic volatility.
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