WASHINGTON, September 2, 2026 — U.S. mortgage purchase applications increased by 2% last week, defying a slight uptick in borrowing costs, according to data released Wednesday by the Mortgage Bankers Association (MBA). The average contract rate for a conforming 30-year fixed-rate mortgage rose by one basis point to 6.79%, marking the highest level in four weeks.
Purchase Demand Shows Resilience
The seasonally adjusted purchase index climbed 2.0% for the week ending August 28, though it remained slightly below its year-ago level. Meanwhile, refinance applications slipped 1.0% and were 19% lower compared with the same period in 2025. The refinance share of total mortgage activity fell to 41.8% from 42.0% the prior week.
"Mortgage rates climbed to their highest point in four weeks," said Mike Fratantoni, MBA's chief economist. He attributed the rise to ongoing concerns about inflation, federal budget deficits, and elevated global bond yields.
Rate Impact on Borrowers
For a $400,000 loan amortized over 30 years, the monthly principal and interest payment at 6.79% totals approximately $2,605. This compares with $2,528 at a 6.50% rate and $2,661 at 7.00%, highlighting the sensitivity of housing affordability to small rate movements.
Bankrate's national average for a 30-year purchase mortgage stood at 6.75% as of 06:30 EDT Wednesday, with the jumbo average at 6.84%. Freddie Mac's separate weekly survey had the 30-year rate at 6.66% on August 27, up from 6.65% the week before.
Market Context and Implications
The rise in mortgage rates has been driven by a climb in Treasury yields, with the 10-year note nearing 4.8% amid concerns over oil prices and inflation. This has weighed on bond markets and, by extension, mortgage-backed securities, keeping lender pricing elevated.
Despite the higher rates, homebuyer demand has proven more resilient than refinancing activity, which remains highly sensitive to interest rate fluctuations. The adjustable-rate mortgage (ARM) share increased to 8.0%, a five-week high, as some borrowers seek lower initial payments.
Loan Sizes and Volume
The average loan amount declined by 0.9% to $372,500, suggesting a shift toward lower-priced homes or increased use of down payment assistance. Overall mortgage applications, including both purchases and refinances, were up 0.8% for the week but remained 9.2% lower than the same period last year.
Outlook
Industry analysts caution that weekly application data can be volatile and may not directly translate to closed home sales. The upcoming Freddie Mac rate report, due Thursday at noon EDT, will provide further clarity on whether bond market pressures continue to influence borrower costs.
As the housing market navigates this period of elevated rates, the balance between supply and demand remains delicate. Additional listings appear to be helping transactions, but affordability constraints continue to weigh on first-time buyers and those with tighter budgets.
