Mortgage rates hit highest level in 3 weeks, weakening demand further

A "For Sale" sign outside of a home in Marana, Arizona, US, on Wednesday, Aug. 5, 2026. Rebecca Noble | Bloomberg | Getty ImagesMortgage interest rates moved even higher last week, causing demand for loans to weaken yet again. Total mortgage application volume dropped 1% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $832,750 increased last week to 6.78% from 6.77% the prior week, with points rising to 0.66 from 0.65, including the origination fee, for loans with a 20% down payment. That is the highest level in three weeks. Applications to refinance a home loan, which are most sensitive to weekly rate moves, fell 2% for the week. They were 17% lower than the same week one year ago, when rates were 9 basis points lower."Refinance applications decreased, particularly for FHA and VA loans, and the average loan size for refinances was at its lowest since June 2025," said Joel Kan, vice president and deputy chief economist at the MBA, in a release. Get Property Play directly to your inboxCNBC's Property Play with Diana Olick cover...