U.S. mortgage rates rose to their highest level in 21 years this week, as demand for mortgages decreased.

According to data released Thursday, in the week ending August 17, the 30-year fixed-rate mortgage averaged 7.09% — up from 6.96% the week before (one year ago, the 30-year fixed-rate was 5.13%). The last time rates were over 7% was in November of last year, when they hit 7.08%. This week’s average rate is the highest the 30-year, fixed-rate mortgage has been since April 2002, when it was 7.13%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.16% from 7.09%, with points decreasing to 0.68 from 0.70 (including the origination fee) for loans with a 20% down payment. That was the third straight weekly increase and the highest level since October 2022, which also matches a high level seen in 2001.

As a result, mortgage demand from homebuyers was 26% lower than the same week one year ago. Applications to refinance a home loan fell 2% for the week and were 35% lower than the same week one year ago. Last year the 30-year fixed was 5.45%, but the year before it was in the 3% range.

On the flip side, applications for a mortgage to purchase a newly built home are rising. According to a separate MBA report released Tuesday, applications are up 35.5% in July, with the Federal Housing Administration sharing that those applications hit the highest level since May 2020. FHA loans offer low down payment options and are popular with first-time homebuyers.

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