US Mortgage Rates Climb to 7.49%, the Highest Level Since 2023

Borrowing costs for the standard American home loan rose sharply in the week ended October 2. The Mortgage Bankers Association reported that the 30-year fixed rate gained 19 basis points to 7.49%, a level not seen since November 2023. The timing is awkward for buyers and for politicians, with midterm elections on November 3 set to decide whether Republicans keep control of Congress.

Why Treasury Yields and Inflation Are Pushing Rates Up

Mortgage pricing follows the 10-year Treasury yield, which crossed 5.3% on Monday after touching a 24-year peak. Investors are reacting to rising oil prices and stronger economic growth data. Home loan rates have risen about 1.4 percentage points since US-Israeli strikes on Iran began in late February. Inflation reached 3.4% in August, well above the Fed’s 2% goal, and officials have hinted at another rate hike before the year ends after September’s increase.

Mortgage Applications Fall as Buyers Step Back

Total mortgage applications dropped 4.2% from the week before, with refinancing falling hardest. MBA deputy chief economist Joel Kan said few homeowners have a reason to refinance at current rates, and many would-be buyers are stepping away from the market.