Editor’s Note: The Mortgage Mix is RISMedia’s highlight reel of need-to-know mortgage-industry happenings. Watch for it every other Friday afternoon.
The numbers: Mortgage rates peaked to a new high this week, climbing back up to the 7% range for the first time in 2026 and hitting their “highest level since May 2024,” as noted by Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit.
The 30-year fixed-rate mortgage clocked in at an average of 7.03%, and the 15-year at an average of 6.42%. Both are well elevated year-over-year as well.
What does this mean: Freddie Mac Chief Economist Sam Khater did not sound the alarm bells for housing just yet, noting in a statement that the market “remains supported by a solid labor market and an economy that is growing at a healthy rate.”
However, Realtor.com® Senior Economist Anthony Smith noted that the rising rate situation “will continue to add to the headwinds in place for home sales” for the coming months.
How is the market reacting: Applications responded to the rate hike by dipping 1.5%, with purchase and refinance applications both down.
Mike Fratantoni, MBA’s SVP and chief economist, noted that with the fixed-rate mortgage peaking, “more borrowers opted for ARMs (adjustable-rate mortgages), with the ARM share reaching 9.8%, as rates for 5/1 ARMs were more than a percentage point lower than those for fixed rate loans.”
Affordability is still challenged, but better historically: The latest foreclosure data from ATTOM saw foreclosure filings rise 1% month-over-month and 13% year-over-year as inflation and rates remain elevated.
However, while ATTOM CEO Rob Barber said that “some homeowners are still facing financial challenges,” he noted that “overall foreclosure volumes remain well below historical norms and the broader housing market continues to demonstrate resilience.”
Additionally, mortgage payments have also seen some improvement in MBA’s latest Purchase Applications Payment Index, moving down from $2,175 to $2,162.
“Homebuyer affordability improved slightly in August, as a decline in the median purchase loan amount helped offset the impact of higher mortgage rates,” said MBA Associate Vice President of Housing Economics Edward Seiler.
The Fed outlook: After the Federal Open Market Committee’s decision to raise interest rates by a quarter point at its last meeting, some Fed members have said that their outlook for the path ahead may include another rate hike.
Philadelphia Federal Reserve President Anna Paulson recently said in a speech that she feels the FOMC may have to raise rates again at its next meeting in order to start heading toward its 2% inflation goal.
“Looking ahead, if conditions evolve as I expect, some modest further tightening may be warranted,” she said, noting that inflation remains “well above our 2% target, and the gap has shown little signs of closing.”
Fed Governor Michael Barr echoed Paulson’s sentiment in a recent speech where he said that “further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”
“We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that,” he said.
