Homeowners have nearly stopped refinancing. The Mortgage Bankers Association’s refinance index fell 3% in the week ending Sept. 18 and stood 62% below the same week a year earlier, the association said in its Sept. 23 weekly survey, as the average 30-year fixed rate climbed above 7%.
The slowest refinancing pace since February 2025
The MBA’s weekly survey reported that “the pace of refinancing fell to its slowest pace since February 2025,” according to Mike Fratantoni, the association’s chief economist. The 30-year fixed conforming contract rate was 7.12%, up from 6.97% a week earlier. Refinance applications made up 39.3% of the total, down from 39.4%.
Refinancing fell much further than home buying did. The MBA’s purchase index was 11% lower than a year earlier on an unadjusted basis, against 62% for refinancings. A separate MBA chart of the week, published Sept. 25, put weekly refinancing activity around 35% below its January level and noted that rates have stayed above 6.5% every week since May 2026.
A year ago the rate was 73 basis points lower
The comparison year explains the size of the drop. Freddie Mac’s weekly survey, whose latest report is dated Sept. 24, put the average 30-year fixed rate at 7.03%, against 6.30% a year earlier. The 15-year average was 6.42%, against 5.49% a year earlier. Freddie Mac’s economists said in the report that the housing market “remains supported by a solid labor market and an economy that is growing at a healthy rate,” a description that sits alongside, not against, the rate rise.
The MBA’s own series shows the same direction, and the upfront cost of a loan rose with the rate. Its 15-year contract rate reached 6.43% from 6.30% the week before, with points climbing to 1.15 from 0.98. The 30-year FHA rate moved to 6.78% from 6.62%, with points at 0.96 from 0.85.
A Fed hike landed in the same week
The survey week also contained the Federal Reserve’s decision to raise short-term rates. In its Sept. 16 statement, the Federal Open Market Committee voted 12-0 to lift the target range for the federal funds rate by a quarter point, to 3-3/4 to 4 percent, and said inflation “remains elevated.” The committee said the increase “will support a timelier return to the Committee’s 2 percent goal.” Mortgage rates do not move one for one with the federal funds rate, but the MBA’s contract rate rose from 6.97% to 7.12% across the week of the decision.
Most mortgages already sit below the going rate
Borrowers with cheap loans have no reason to trade them in. Federal Reserve Governor Barr said in a Sept. 23 speech in Chicago that about half of outstanding mortgages carry rates of 4% or lower and nearly 80% are below 6%, citing 2026 second-quarter data from the National Mortgage Database. Against a 7.12% market rate, a large majority of homeowners would swap a lower rate for a higher one by refinancing.
The MBA data show where borrowers went instead. Fratantoni said that “with fixed rates much higher, more borrowers opted for ARMs,” and the ARM share of applications reached 9.8%. The refinance share of 39.3% is a share of a shrunken total, since the index itself is 62% lower than a year ago.
Home equity keeps growing, but slowly
The equity that homeowners might draw on is still rising, if at a slower pace. The Federal Housing Finance Agency’s second-quarter House Price Index showed U.S. house prices up 2.1% from the second quarter of 2025 and 0.3% from the first quarter of 2026. Prices rose in 46 states and the District of Columbia over the year, with New Mexico the only state that declined, at 1.2%.
The pool of owners is large. The Census Bureau’s Housing Vacancies and Homeownership survey for the second quarter of 2026, released July 28, put the homeownership rate at 65.0% and the homeowner vacancy rate at 1.2%. A cash-out refinance replaces the existing loan at today’s rate, so it applies the 7% market rate to the whole balance rather than only to the cash withdrawn, which is the choice that Barr’s finding on low-rate mortgages puts in front of owners with a first loan at 4% or lower.
Where homeowners can get a neutral second opinion
The Consumer Financial Protection Bureau’s mortgage help page tells homeowners to contact their servicer and a HUD-approved housing counselor, and lists a phone line at (855) 411-2372. HUD’s Office of Housing Counseling funds a nationwide network of approved agencies, and its program page lists homebuyer education, foreclosure prevention, rental and reverse-mortgage counseling among their services.
The Sept. 23 release is the latest weekly survey the MBA has published as of Sept. 29. It is the association’s own count of what borrowers did in the week ending Sept. 18, and its central finding, in Fratantoni’s words, is that refinancing has slowed to its lowest pace since February 2025, with the refinance index 62% lower than the same week one year ago.
Home-cost relief beyond the mortgage payment
With refinancing out of reach for many, older homeowners looking to trim housing costs often turn to relief that runs through the county or state instead of a lender. Freezes, exemptions and credits generally have to be applied for and renewed.
The Senior Property Tax & Home-Cost Relief Kit explains the 5 kinds of property-tax relief and who qualifies, and lays out heating, cooling and home-repair help.
Sort the 5 kinds of property-tax relief by who qualifies →
This article was produced with AI assistance and checked against the primary sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
