US mortgage applications declined 4.2% in the week ending October 2, the fifth straight weekly drop and the lowest level since January 2025, according to data from the Mortgage Bankers Association. The decrease coincided with a sharp rise in borrowing costs, as the benchmark 30-year fixed mortgage rate climbed to 7.49%, its highest level in nearly three years.
The move reflected a continued surge in long-term yields at the turn of the month, despite US Treasury efforts to ease pressure on the long end of the curve by boosting bill issuance and expanding buybacks of nominal notes and bonds. Refinancing applications, which tend to react quickly to shifts in interest rates, fell 7.5% from the prior week, while applications for home purchases were down 2.1%.
