a for sale sign outside a house in albany california on tuesday may 31 2022 homebuyers are facing a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade total mortgage application volume was 527 lower last week than the same week one year ago according to the mortgage bankers associations seasonally adjusted index sharply rising interest rates are decimating refinance volume and those rates along with skyhigh home prices and a shortage of houses for sale are hitting demand from potential buyers last week the average contract interest rate for 30year fixedrate mortgages with conforming loan balances 647200 or less increased to 565 from 540 with points rising to 071 from 060 including the origination fee for loans with a 20 down payment this week they surged even higher with the average rate hitting 628 on tuesday according to a daily measure from mortgage news daily mortgage rates followed treasury yields up in response to higherthanexpected inflation and anticipation that the federal reserve will need to raise rates at a faster pace said joel kan an mba economist weekly mortgage application volume rebounded slightly compared with the previous holidayadjusted week refinance demand rose 4 for the week but was 76 lower than the same week one year ago mortgage applications from homebuyers rose 8 for the week but were 16 lower compared with a year ago despite the increase in rates application activity rebounded following the memorial day holiday week but remained 029 percent below preholiday levels added kan the housing market is now reeling in a rising interest rate environment after two years of recordlow rates fueled by the federal reserves covid pandemicinduced purchases of mortgagebacked bonds home prices are overheated and affordability is now in the basement major real estate brokerages redfin and compass both announced layoffs tuesday mortgage rates increased faster than at any point in history we could be facing years not months of fewer home sales and redfin still plans to thrive if falling from 97 per share to 8 doesnt put a company through heck i dont know what does wrote redfin ceo glenn kelman on the companys website