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Rising mortgage rates cause surge in demand for riskier loans

Prospective buyers arrive during an open house in Rancho Cucamonga, California, US, on Saturday, May 9, 2026. Kyle Grillot | Bloomberg | Getty ImagesMortgage rates continued to climb higher last week, dampening demand for loans from both current…

Rising mortgage rates cause surge in demand for riskier loans

Prospective buyers arrive during an open house in Rancho Cucamonga, California, US, on Saturday, May 9, 2026.

Kyle Grillot | Bloomberg | Getty Images

Mortgage rates continued to climb higher last week, dampening demand for loans from both current homeowners and potential homebuyers. They also pushed consumers to riskier loans that offer lower rates.

Total mortgage application volume dropped 2.3% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The weekly average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, increased last week to 6.56% from 6.46%, with points decreasing to 0.60 from 0.63, including the origination fee, for loans with a 20% down payment. That is the highest rate in seven weeks.

“Ongoing concerns around inflation from higher fuel costs combined with rising concerns over global public debt pushed Treasury yields higher in the U.S. And abroad last week,” said Joel Kan, an MBA economist, in a

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MBA and ex‑B bureau chief specializing in global finance and fintech. Marcus speaks Mandarin, Japanese, and English, and has interviewed CEOs from the Fortune 50 to Y‑Combinator unicorns. Marcus Liu delivers sharp analysis on markets, startups, and corporate strategy for investors and entrepreneurs alike.