Average 30-year mortgage rates are now above 7%
Melissa Cohn of William Raveis Mortgage highlighted that when markets see the Federal Reserve effectively tackling inflation, bond yields can decline, potentially bringing mortgage rates down despite higher benchmark rates.https://t.co/E3CHIOsyLQ
— Mortgage Professional America Magazine (@MPAMagazineUS) September 18, 2026
ARM demand climbs as rate gap widens
The renewed rate pressure has revived demand for adjustable-rate mortgages. The ARM share of applications jumped to 9.8%, up from 8.4% the prior week. The 5/1 ARM rate eased to 6.10% from 6.23%, sitting more than a full percentage point below the 30-year fixed.
“With fixed rates much higher, more borrowers opted for ARMs, with the ARM share reaching 9.8%, as rates for 5/1 ARMs were more than a percentage point lower than those for fixed rate loans,” Fratantoni said.
The shift tracks a pattern MPA has covered throughout 2026. The widening spread between fixed and variable rates has led brokers to increasingly pivot toward adjustable-rate mortgages as the rate gap between fixed and variable products widens, a strategy that is now reaching a broader slice of the borrower market.
September’s data arrives in a market already strained by limited inventory and persistent home prices. The national median home sale price reached $395,000 in August, a 2.1% year-over-year gain, even as sales volume declined and the number of available homes continued to expand, according to Homes.com’s national housing market report.
High mortgage rates are also keeping the US housing market subdued through 2026, with the MBA itself forecasting the 30-year rate in a 6.1%–6.3% range for Q4, a projection September’s reading has already overtaken.
