US mortgage rates at four-week high

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) in the US rose by 2 basis points to 6.84% in the week ending July 18th, 2025 — the highest level in four weeks — up from 6.82% the previous week, according to the Mortgage Bankers Association.

The modest uptick in rates reflects broader moves in the bond market, as mortgage rates typically track 10-year Treasury yields, which climbed last week following a string of stronger-than-expected economic data, including robust retail sales and a resilient labor market.

Despite the relatively small increase in rates, refinancing activity remained under pressure. “With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week,” the MBA noted.

Compared to the same period a year earlier, borrowing costs were essentially unchanged, with the average 30-year fixed mortgage rate then also at 6.82%, highlighting the persistent affordability challenges in the housing market.

Meanwhile, the overall volume of mortgage applications inched up by 0.8% from the prior week, marking a tentative recovery after a steep 10% drop — the sharpest weekly decline in three months — during the second week of July. The muted gain underscores the hesitancy among prospective buyers, many of whom appear to be holding off on major decisions until there’s more clarity on the direction of borrowing costs and potential Federal Reserve policy shifts.

Breaking down the data, applications to refinance existing mortgages — which are typically more sensitive to weekly rate changes — fell by 3.3%, maintaining a 12% drop from earlier in the month. On the other hand, applications to purchase new homes rose by 3%, providing a modest rebound after a 7% decline the previous week.

The increase in purchase applications may suggest that some homebuyers are stepping back into the market amid expectations that rate hikes have peaked and that conditions could stabilize in the months ahead.

Still, activity across the board remains well below pre-pandemic levels, reflecting the broader affordability squeeze caused by high interest rates and elevated home prices. Until there is more meaningful downward movement in mortgage rates or home prices, analysts expect the housing market to remain subdued through the second half of 2025.