According to HousingWire, the Mortgage Bankers Association reported that mortgage applications declined for the week ending September 18, 2026, as interest rates continued climbing. The 30-year fixed rate pushed past 7 percent, reaching its highest point since May of 2024. Both refinancing and home purchase applications fell during this period, with refinancing dropping more sharply than purchases. The data does show some adjustment for the Labor Day holiday, which affected the week-to-week comparison.
As rates climbed higher, we saw borrowers shift their strategy. More people began looking at adjustable-rate mortgages instead of locking into higher fixed rates. The share of ARM applications increased notably, since the rates on five-year adjustable mortgages were running more than a full percentage point lower than the fixed-rate options. This tells me that people are actively shopping around and reconsidering their approach when fixed rates get this expensive.
The refinancing market particularly cooled down during this stretch. According to the MBA data, refinancing activity hit its slowest pace since February of 2025, and year-over-year, refinancing applications were dramatically lower than the same week the previous year. Even with the holiday adjustment factored in, the overall picture shows borrowers pulling back from both refinancing existing loans and applying for new purchase mortgages.
The MBA's chief economist noted that jumbo loan rates also climbed during this period. Whether someone was looking at a standard conforming loan, a larger jumbo mortgage, or an FHA-backed option, rates were moving up across the board, though the adjustable-rate products remained the one bright spot for borrowers seeking lower initial rates.
What I am seeing locally here in the Bay Area and across the East Bay is that higher rates are definitely making people pause and recalculate their options. Buyers who might have pulled the trigger three or four months ago are now weighing whether to move forward at these rates or wait for conditions to potentially improve. For sellers, this slower application activity suggests that buyer pools may shrink, which could affect pricing momentum and how quickly homes move off the market in our region.
