Rising interest rates and overseas conflicts appear to be weighing on the lending industry, raising concerns about next spring.
Although there were signs of momentum earlier this year, mortgage applications fell 10.9%, a turbulent year.
This is according to the latest data from the Mortgage Bankers Association. The data specifically shows that the MBA’s Market Composite Index, a measure of mortgage application volume, fell by a seasonally adjusted 10.9% last week compared to the previous week. In addition, the MBA Refinance Index rose 69% year over year but fell 19% week over week.
MBA Vice President and Deputy Chief Economist Joel Kang cited the “Middle East conflict” and rising oil prices as factors affecting the mortgage market, as well as “the risk of a broader inflation shock.”
Joel Kang
“Mortgage interest rates rose across the board, and the 30-year fixed rate rose to 6.30%, the highest interest rate since December 2025,” Prime Minister Suga continued in the statement. “Interest rates are up about 20 basis points compared to two weeks ago, which has caused a reversal in refinance activity, particularly traditional refinance applications, which have fallen 27% over the past week. Government refinances have also declined, but by 5% as FHA rates have not risen as quickly.”
MBA data further shows that the average mortgage rate for a 30-year loan rose from 6.19% to 6.30% last week. For 15-year loans, the average interest rate rose from 5.54% to 5.66%.
News of rising interest rates and a drop in mortgage applications is likely to be a blow to real estate professionals who were counting on the spring buying season to reverse years of market weakness. And indeed, it initially looked like the spring season would go well as interest rates fell.
jeff tucker
However, uncertainty has increased in recent weeks, mainly due to the Iran war. Jeff Tucker, Windermere’s chief economist, told Inman last week. “I went to Windermere for about a week and had some good things happen, but now those stars aren’t aligning.” But he also offered some hope.
“But we’re in the early stages of the spring home buying season, so it’s still possible that this impact will be limited,” Tucker said, referring to the Iran war. “It depends on how quickly the issue is resolved.”
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