Mortgage Applications Decline as Rates Climb to 6.85%

Key facts

• Mortgage applications fell 2.7% for the week ending September 4, 2026.
• The average rate for a 30-year fixed mortgage rose to 6.85%.
• Refinance activity decreased by 6% week-over-week.
• The share of adjustable-rate mortgages (ARMs) increased to 8.5% of total applications.
• Mortgage intent, measured by credit-pull activity, saw a slight increase.

Mortgage applications saw a further decline of 2.7% in the week ending September 4, 2026, as interest rates continued to climb, with the 30-year fixed rate reaching 6.85%. This marks the highest rate since June 2025 and is 36 basis points higher than a year ago, according to data from the Mortgage Bankers Association (MBA).

Refinance activity was significantly impacted by the rising rates, dropping 6% from the previous week and reaching its slowest pace since May 2025. The refinance share of total mortgage activity decreased to 40.9% from 41.8% the prior week.

Purchase applications remained relatively stable, showing a slight decrease of 0.2% on a seasonally adjusted basis. However, there was a notable shift towards adjustable-rate mortgages (ARMs), with their share of applications increasing to 8.5%, the highest level since June. This suggests borrowers are seeking lower initial payments despite the overall rate environment.

Despite the elevated mortgage rates, Xactus's Mortgage Intent Index, which tracks credit-pull activity, increased slightly to 117.9. This indicates a marginal uptick in borrower interest, though the index remains near its lowest non-holiday levels of the year. The year-over-year comparison for this index is less meaningful due to the timing of Labor Day last year.