US Mortgage Applications Rise Despite Higher Rates and House Prices
David Garner
FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate
📈 Mortgage Rates Hit 6.98% – But Buyer Demand Still Rises. Here’s Why.
Mortgage rates climbed for the third straight week to their highest level since January, hitting 6.98%. Yet homebuyer demand grew, not shrank.
That’s right: mortgage applications to purchase a home rose 2% week-over-week and are now 18% higher than the same time last year, according to the Mortgage Bankers Association (MBA).
So, what’s fuelling this unexpected resilience?
Related: The Best USA Mortgages for Foreign Nationals in 2025
🏡 Purchase Demand Defies Rate Hikes
Despite the higher cost of borrowing, purchase applications continue to grow—driven largely by increased housing inventory in many markets.
“Purchase applications were up over the week and continue to run ahead of last year’s pace as increased housing inventory in many markets has been supporting some transaction volume, despite the economic uncertainty,” said Joel Kan, MBA economist.
📊 Purchase Mortgage Application Snapshot
| Metric | Change |
|---|---|
| Weekly Change in Purchase Apps | +2% |
| Year-Over-Year Change | +18% |
| 30-Year Fixed Average Rate | 6.98% |
| Points (incl. origination fee) | 0.67 |
🔁 Refinances Struggle Under Rate Pressure
Not all mortgage segments shared the optimism. Applications to refinance fell 7% week-over-week, though they still remain 37% above last year’s levels. Higher rates hit VA refinances especially hard, down 16%.
📉 Refinance Mortgage Application Snapshot
| Segment | Weekly Change |
|---|---|
| Total Refinance Apps | -7% |
| Conventional Refis | -6% |
| VA Refis | -16% |
| YoY Refi Demand | +37% |
📉 Economic Signals Could Ease Rate Pressure
There’s a bit of good news on the horizon for rate-watchers. A recent Consumer Confidence Index report was stronger than expected overall, but it did flag weakness in labor market perceptions—and that could mean lower rates ahead.
“Weaker labor conditions tend to push rates lower, all else equal,” said Matthew Graham, COO of Mortgage News Daily.
As a result, some mortgage lenders already lowered rates slightly to kick off the holiday-shortened week.
Related: Dave Ramseys Predictions for US Mortgage Rates in 2025
🧐 What This Means for Buyers & Sellers
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For Buyers: Despite near-7% rates, more housing inventory and slightly looser competition are making this a window of opportunity—especially for those who were sidelined last year.
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For Sellers: Rising demand in some markets could strengthen negotiating power, especially if rates dip even slightly from current highs.
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For Investors: Rising purchase volume and strong YoY refinance demand signal that real estate is far from frozen—cash flow positive properties in markets with string affordability offer the best opportunities.
Related: How to Buy Property in the USA as a Foreigner
Bottom Line: Mortgage rates may be flirting with 7%, but the housing market hasn’t flinched. Increased inventory, stabilizing economic data, and flexible buyers are keeping demand stronger than expected.
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