WASHINGTON, May 28, 2026, 07:04 (EDT)
Mortgage rates in the U.S. rose last week to the highest level in nine months, sending borrowers back to the sidelines and dimming expectations that lower rates would give a lift to the spring housing market.
Mortgage rates climbed last week, with the Mortgage Bankers Association’s average 30-year fixed contract rate up 9 basis points to 6.65% for the week ended May 22. That’s the highest level since August 2025. Mortgage applications dropped 8.5% from the week before, Reuters said.
Timing is the main issue right now. The housing market still lacks affordable homes, and that early-year push toward 6% rates has slipped away just when buyers and lenders usually expect activity to pick up for the season.
Refinance demand dropped sharply, with the refinance index down 18% week over week. Purchase applications edged 0.4% lower but were still up 5% from the same week a year ago, according to MBA data cited by HousingWire.
“The 30-year fixed rate has increased 30 basis points over the past five weeks,” Joel Kan, vice president and deputy chief economist at MBA, told HousingWire. “Many borrowers understandably backed away from refinancing last week,” Kan said. HousingWire
The pressure is showing up in the bond market, not only from the Federal Reserve. Mortgage rates often move with the 10-year Treasury yield and mortgage-backed securities—those are bundles of home loans that get sold to investors—more than with the Fed’s short-term rate. Brian Shahwan, vice president and mortgage banker at William Raveis Mortgage, told CBS News: “higher inflation equals higher bond yields.” CBS News
Inflation has taken this from just a housing issue to something bigger. Reuters said consumer prices climbed 3.8% in April from a year ago, higher than the 2.9% pace in August. The report noted more Fed officials are warning rates could go higher if inflation sticks around.
Freddie Mac’s own survey showed the same increase. The 30-year fixed mortgage hit 6.51% as of May 21, up from 6.36% the week before. The 15-year fixed rate was at 5.85%. Chief Economist Sam Khater said borrowers might save money by “shopping around” and getting multiple quotes. Freddie Mac
Higher stakes now for big mortgage shops. Rocket Mortgage, United Wholesale Mortgage and CrossCountry Mortgage led U.S. lending by 2025 origination volume, Bankrate said, but with fewer refis, lenders are more exposed to how weekly payments hit buyers in the purchase market.
Rate lock-in is still keeping homeowners on the sidelines. Nearly 69% of mortgages had rates at or below 5% in Q3 2025, according to a Realtor.com analysis of FHFA numbers. That’s left many people holding onto their cheap loans instead of selling into a higher rate.
Nancy Vanden Houten, U.S. lead economist at Oxford Economics, said in a note quoted by Reuters that a lack of sellers is adding to the supply crunch. Reuters reported that turnover for existing owner-occupied homes averaged 4.7% in the last four quarters, lower than during the global financial crisis.
But if bond yields drop further, that could take off some of the pressure. Reuters reported Treasury yields fell this week as traders looked for progress on reopening the Strait of Hormuz, and Freddie Mac’s next update on mortgage rates comes out Thursday at noon ET. The risk runs the other way too—if Iran tensions drag on or prices rise, 30-year mortgages could touch 7%, according to Jeff Taylor of Mphasis Digital Risk, who spoke to CBS News.
Lenders and buyers are sticking to a tighter market again. The average purchase loan size hit a record of $473,600, according to HousingWire, which says borrowers looking for smaller loans are the first to pull back as rates go up and buyers lose some power.
