Mortgage rates hit August high as refinance demand drops 18%

US mortgage rates rose to 6.65 per cent in the week ended May 22, their highest level since August, and refinance demand fell 18 per cent as higher Treasury yields pushed borrowing costs higher for households, CNBC reported. Bloomberg reported that the average 30-year fixed rate has climbed about 30 basis points over the past five weeks.

The Mortgage Bankers Association figures are a quick read on how moves in the bond market reach households. This week’s report shows that borrowers waiting for a cheaper refinancing window are pulling back fast as long-dated yields rise.

Total mortgage application volume fell 8.5 per cent from a week earlier, while refinance applications made up 38 per cent of overall demand, the lowest share since June 2025, according to CNBC’s account of the Mortgage Bankers Association data. Purchase applications also slipped on the week, though CNBC said buyers were still more active than a year earlier.

Joel Kan, the MBA’s vice president and deputy chief economist, said refinancing was taking the brunt of the move. “Overall, refinance applications accounted for 38 percent of applications, the lowest share since June 2025,” Kan told CNBC.

That matters because refinancing is usually the clearest test of whether existing homeowners can lower a monthly payment. With rates back near late-summer highs, fewer borrowers have a reason to replace an older loan.

Treasury yields feed through

Bloomberg said the average 30-year fixed mortgage rate is now about 30 basis points higher than it was five weeks ago, in line with the rise in longer-dated Treasury yields. For borrowers trying to reset an existing mortgage, that has turned a steady squeeze into a more obvious jump in financing costs.

The August comparison matters because it shuts off the softer patch many households had hoped would reopen the market this spring. The latest weekly reading instead suggests another waiting period for borrowers watching yields for a better entry point.

The application figures also give investors a fast check on whether the debate over Federal Reserve rate cuts and inflation is starting to tighten consumer credit conditions. Markets can argue over policy for weeks; refinancing demand usually reacts faster.

For lenders, the weekly application report is more than a housing statistic. It is an early transmission gauge for the consumer side of the rates story.

The figures do not yet point to a broader housing-market freeze. CNBC said purchase demand remained above year-earlier levels, a sign that homebuying has not shut down in the same way. Still, the refinance slump is an early warning that even a modest rise in long-end rates can hit the most rate-sensitive corner of household borrowing hard.

The main signal in the latest data is the speed of the retreat. Higher rates have already knocked out a sizeable share of rate-sensitive demand, giving lenders, borrowers and investors a real-time gauge of how quickly higher yields can choke off refinancing activity.