Mortgage rates that rose to their highest level since last June pushed mortgage demand lower across the board last week, the Mortgage Bankers Association (MBA) said Wednesday.

The MBA’s Market Composite Index, a measure of mortgage loan application volumes, slid 2.7% on a seasonally adjusted basis over the week ending Sept. 4.

Seasonally adjusted purchase mortgage applications were largely unchanged, edging just 0.2% lower. However, the unadjusted purchase index halted five straight weeks of annual declines, instead kicking off September 4% higher than same week a year ago.

Steadily rising borrowing costs offered no relief to refinance volumes, with the MBA reporting a 6% decline from the previous week and a 25% plunge compared to the prior year.

“Refinance applications remain significantly impacted by these higher rates, falling to the slowest weekly pace since May 2025,” remarked Joel Kan, deputy chief economist at the MBA, in the trade group’s weekly applications report.

Average mortgage rates for 30-year fixed-rate loans that conform to Fannie Mae and Freddie Mac underwriting guidelines hit 6.85% last week, up from 6.79% a week earlier and 6.49% a year ago. Last week’s increase is notable because rates had held just under 6.8% for the entire month of August, according to MBA data.

With investors nervous about resurgent inflation, federal spending deficits and macroeconomic volatility, the last time average mortgage rates hovered below 6.5% was early May. After spending January and February around 6%, average rates have now remained above 6.5% for 17 consecutive weeks.

“Higher mortgage rates continue to weigh on prospective homebuyers looking to act, even as housing inventory has increased in many markets,” added Kan, who also noted that adjustable-rate mortgage usage has risen as rates have increased, hitting its highest level since June at about 8.5% of total application activity last week.

Refinances accounted for nearly 41% of total application activity, down from about 42% the week prior.

Meanwhile, the share of applications for government mortgages insured by the Federal Housing Administration reversed two weeks of declines, rising to 17.2% from 15.9% the previous week. Average mortgage rates for FHA loans rose to 6.53% from 6.49%.

Applications for government mortgages backed by the Department of Veterans Affairs decreased to 12% of overall activity from 13.6% the previous week.