Mortgage rates have surged to their highest levels in years, leading to a 6% decline in total mortgage demand, according to the Mortgage Bankers Association. The average interest rate for 30-year fixed-rate mortgages also increased significantly, causing applications for both refinancing and home purchases to drop. The rise in rates has pushed many potential homebuyers out of the market, resulting in the lowest level of purchase activity since 1995. Furthermore, adjustable-rate mortgage applications have increased as borrowers seek lower rates. The current economic data suggests that the Federal Reserve may need to adopt a more aggressive interest rate policy.