Highlights

• Average 30-year mortgage rates ticked up to 6.69% in the week ending August 22.

• Overall mortgage applications slipped 0.5%, extending a recent downward trend.

• Purchase activity shows resilience as home prices stabilize and inventory grows.

Mortgage Rates Inch Higher Amid Housing Market Shifts

The average interest rate for a 30-year fixed-rate mortgage edged up slightly to 6.69% in the week ending August 22, up from 6.68% the previous week, according to the Mortgage Bankers Association (MBA). While the change is minimal, it reflects the ongoing volatility in borrowing costs for homeowners.

Mortgage applications fell 0.5% last week, following a 1.4% decline in the previous period, signaling that some buyers remain cautious as rates stay elevated.

Yet, not all signs point to cooling demand. Joel Kan, an economist at the MBA, noted that “prospective buyers appear to be less sensitive to rates at these levels and are more active, bolstered by more inventory and cooling home-price growth in many parts of the country.” In other words, a wider selection of homes and slower price increases are helping offset the pressure of higher borrowing costs.

Mixed Trends in Mortgage Applications

The MBA’s weekly survey paints a nuanced picture. The Mortgage Market Index fell to 275.80 points from 277.10, while the Refinance Index dropped to 894.10 from 926.10, reflecting weaker refinancing activity. Meanwhile, the Purchase Index climbed to 163.80 points from 160.30, suggesting that buyers are gradually stepping back into the market despite elevated rates.

For those seeking lower monthly payments, the 15-year mortgage rate eased slightly to 5.69% from 5.71%. The average mortgage size also dipped to $372,750 from $376,080, showing modest adjustments as higher rates temper affordability at the upper end of the market.

How Buyers and Investors Are Responding

Even with rates well above the lows seen in recent years, buyers are showing growing willingness to act. Analysts say this reflects both psychological adaptation to higher rates and the lure of markets where home-price growth is slowing.

Lenders, too, are recalibrating. Banks are balancing growth opportunities against potential defaults as borrowers adjust to higher monthly payments. The result is a cautiously optimistic market, where rate levels are no longer the only factor driving buyer behavior.

Looking Ahead: A Delicate Balance

As the U.S. housing market continues to navigate elevated mortgage rates, all eyes will be on inventory, home-price trends, and broader economic signals. If rates remain near current levels and inventory continues to grow, purchase activity could pick up, helping offset declines in refinancing. On the other hand, a sudden spike in rates could slow buyer momentum.

For now, the housing market sits in a delicate equilibrium, shaped by both borrowing costs and improving affordability. Buyers, sellers, and investors alike will be watching closely to see which forces dominate in the months ahead.