Mortgage rates rise again, nudging buyers toward riskier ARMs as demand cools

U.S. mortgage rates rose again last week, with the 30-year fixed-rate average at 6.56% (up from 6.46%), the highest in seven weeks, as higher yields push borrowers toward riskier ARMs. Total mortgage applications fell 2.3% and purchase applications declined 4%, signaling softer demand. The ARM share rose to nearly 10%—the highest since October 2025—reflecting demand for lower initial payments despite later rate resets. The five-year ARM averaged 5.76%. Refinance activity fell 0.1% but remained 35% higher year over year. Analysts attribute the rise to inflation concerns and rising Treasury yields.