Rising borrowing costs knocked refinance and purchase activity lower in mid‑March
US mortgage demand pulled back in mid‑March as borrowing costs climbed to their highest level since last autumn, reversing a brief rally that energized refinancers and rate‑sensitive buyers.
Applications in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey dropped 10.5% for the week ending March 20 on a seasonally adjusted basis, following a similar decline the prior week.
Refinancing activity fell 15% week over week but remained 52% higher than a year earlier, while purchase applications declined 5% and were just 5% above year‑ago levels.
Average loan sizes also edged lower, suggesting borrowers were stretching less at today’s rates.
Refinances hit as “higher‑for‑longer” fears took hold
“The threat of higher‑for‑longer oil prices continued to keep Treasury yields elevated, and mortgage rates finished last week higher. The 30‑year fixed rate rose to 6.43%, more than 30 basis points higher than at the end of February and at its highest level since October 2025,” said Joel Kan, MBA’s vice president and deputy chief economist.
“Given this period of increasing mortgage rates and diminishing refinance incentives, refinance applications decreased 15% as applications across all loan types declined. Purchase applications were also down last week, as higher mortgage rates, coupled with affordability constraints and economic uncertainty, pushed some potential homebuyers to the sidelines,” Kan said.
The MBA reported that the refinance share of activity slipped to 49.6% from 52.3% the previous week, while the adjustable‑rate mortgage share rose to 8.1%.
Thirty‑year fixed rates on conforming loans increased to 6.43%, with jumbo, FHA and 15‑year products all posting similar double‑digit basis‑point moves higher.
From brief rate relief to renewed pressure
Only a few months earlier, US mortgage rates fell to one‑year lows, briefly igniting a surge in applications as borrowers seized on lower fixed‑rate offers and pulled ARM volume below 10% of activity.
Heading into 2026, other industry voices said they were still preparing for a potential refinance boom as the Federal Reserve eventually eased policy, but cautioned that any sustained pickup would depend on rates moving closer to the mid‑5% “magic number” that many borrowers were waiting for.
Mortgage rates dipped below 6% for the first time in three and a half years, before it climbed for three straight weeks, pushing the 30-year fixed rate to its highest level in more than three months. The war with Iran unsettled global markets and reignited inflation fears, driving borrowing costs higher.
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