U.S. mortgage rates hit their highest level in more than two years, adding
pressure to a housing market already strained by high prices and weak sales. The
Mortgage Bankers Association (MBA) said the contract rate on 30-year fixed
mortgages rose 15 bps in the week ended Sept. 18 to 7.12%, the highest since May
2024. The 5-year adjustable-rate mortgage rate fell 13 bps to 6.10%. Rates have
trended higher since February after the Iran conflict pushed energy prices and
reignited inflation concerns; the Fed last week delivered its first policy-rate
increase since 2023. Mortgage demand weakened: the MBA purchase index fell 0.8%
to a four-week low and the refinancing index dropped 2.6% to its weakest level
since Feb. 2025. A sustained move above 7% could further damp housing demand.
