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Mortgage Rates Rise to Nine‑Month High, Crushing Refinance Activity

Geopolitical tensions over the Iran war have driven oil prices and long‑term yields higher, leaving refinancing largely closed for many homeowners.

Overview

  • The average 30‑year fixed mortgage climbed to about 6.65% for the week ended May 22, a nine‑month high reported by the Mortgage Bankers Association and confirmed by multiple lenders.
  • Mortgage applications fell 8.5% from the prior week because refinance requests plunged roughly 18%, pushing the refinance share to about 37.5%, the lowest level since June 2025.
  • Freddie Mac’s May 28 Primary Mortgage Market Survey showed the 30‑year rate at 6.53%, reflecting continued volatility as Treasury yields and bond markets reacted to shifting ceasefire hopes.
  • Purchase demand has held up better than refinances, dipping only modestly and running about 5% above last year, but activity is concentrated in higher‑balance loans with the average purchase loan near $473,600.
  • Core housing data show modest price gains—FHFA reported single‑family prices up 0.1% in March and 1.7% year‑over‑year—while higher rates and inflation pressures tied to energy costs are eroding affordability and could cool sales further if tensions persist.