An article summarized by Reuters:
The average 30-year fixed mortgage rate jumped 19 basis points to 7.49% for the week ending October 2nd, its highest level since November 2023. The increase is making homeownership more expensive and comes just weeks before the November 3 elections, where housing affordability and the cost of living are major concerns for voters.
Mortgage rates closely follow the 10-year Treasury yield, which has surged amid concerns about inflation, higher oil prices and stronger-than-expected economic growth. Mortgage rates have risen roughly 1.4 percentage points since late February, while inflation reached 3.4% in August, well above the Federal Reserve's 2% target. Although markets currently expect the Fed to hold rates at its October meeting, another rate hike remains possible later this year.
Higher borrowing costs are already weighing on housing demand. Mortgage applications fell 4.2% last week, while refinancing activity dropped sharply because few homeowners can benefit from refinancing at current rates. The result is a tougher environment for buyers, as higher monthly payments are pushing potential homeowners to delay purchases while existing homeowners remain reluctant to give up lower-rate mortgages.
