The average rate on a 30-year fixed-rate mortgage climbed to 7.40% this week, its highest level since November 2023, as a months-long selloff in long-term Treasury bonds pushes borrowing costs higher across the economy and further chills the housing market heading into the final stretch of the year.
Freddie Mac's weekly survey showed the 30-year rate rising from 7.28% a week earlier and from 7.03% two weeks before that — the seventh consecutive weekly increase. A year ago, the same loan averaged 6.34%. The 15-year fixed rate, popular with homeowners refinancing, rose to 6.73%, its highest level since May 2024. A separate measure from the Mortgage Bankers Association put the 30-year contract rate even higher, at 7.49% for the week ended Oct. 2 — also the highest since November 2023.
A Seventh Straight Weekly Climb
Mortgage rates have tracked a broader bond-market rout. The 10-year Treasury yield, which mortgage rates closely follow, touched a 24-year high above 5.3% earlier this week on persistent inflation worries tied to elevated oil prices and stronger-than-expected economic growth data. Home borrowing costs have risen roughly 1.4 percentage points since joint U.S.-Israeli strikes on Iran began in late February, a stretch that has coincided with sustained upward pressure on long-term rates. Treasury yields eased modestly by Friday's close, with the 10-year slipping to about 5.24% from Monday's 5.32% peak, but mortgage rates — which typically lag the bond market by several days — have yet to reflect that reprieve.
The toll on demand showed up immediately in the Mortgage Bankers Association's weekly applications survey, reported by Hoodline. Total mortgage application volume fell 4.2% for the week ended Oct. 2, after a 6% drop the week before. Refinance applications dropped 8% and were running 56% below the same week a year earlier, while purchase applications fell 2% and sat 15% below last year's pace. Adjustable-rate loans, often a sign of borrowers stretching to find an affordable monthly payment, made up 10.3% of applications in the prior week — the highest share since October 2025.
Very few homeowners have an incentive to refinance at these rates.
Joel Kan, deputy chief economist, Mortgage Bankers Association
Kan said the climb in borrowing costs has also pushed many would-be buyers to delay purchases altogether, layering onto an affordability squeeze that predates this year's rate spike. National home prices rose 1.9% year over year in July, up from a 1.6% gain in June, adding to pressure on buyers now facing rates nearly a full percentage point above where they stood twelve months ago.
A Fed Meeting Looms, With Little Relief in Sight
The next test comes at the Federal Reserve's Oct. 27-28 meeting, the central bank's first gathering since it raised its benchmark rate a quarter point to a target range of 3.75% to 4.00% in September to counter persistent inflation. Futures markets were pricing roughly an 80% chance the Fed holds rates steady this time, a signal that policymakers may be reluctant to cut even as the housing sector absorbs the pain of nearly three-year-high borrowing costs.
For homebuyers and current owners alike, that leaves little near-term relief. Refinancing has effectively stalled for anyone who locked in a rate over the past three years, and the MBA's data suggests purchase activity is also softening as buyers wait out the rate environment rather than stretch into a loan above 7%. Freddie Mac and the MBA are both set to publish updated weekly figures again this coming Thursday, with the trajectory of the 10-year Treasury yield — not any single Fed decision alone — likely to remain the dominant force behind where mortgage rates head next.
