US Mortgage Rates Rise to 7.49% to Hit Three-Year High

Average US mortgage rates jumped to 7.49% last week, reaching their highest point in nearly three years. The sharp climb has added fresh financial pressure on prospective buyers across the country.

The Mortgage Bankers Association reported that the 30-year fixed-rate mortgage rose 19 basis points in the week ended October 2. Borrowing costs now stand at their highest mark since November 2023.

The sudden increase in home borrowing costs quickly slowed lending activity across the United States. Overall mortgage applications dropped 4.2% from the prior week, according to industry survey data cited by Reuters.

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Refinancing requests fell sharply during the same period. Total loan application volumes sank to their weakest level since February 2025. Applications have now dropped by nearly 50% since January.

"Very few homeowners have an incentive to refinance at these rates, and the jump in borrowing costs has caused many potential borrowers to step back from the purchase market," said Joel Kan, deputy chief economist at the MBA.

Mortgage rates have tracked sharp increases in the 10-year US Treasury note yield. Yields topped 5.3% earlier this week, marking a 24-year high.

Rising oil prices and strong economic growth reports fueled those gains. Home borrowing rates have climbed roughly 1.4 percentage points since joint US-Israeli strikes against Iran began in late February.

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The Federal Reserve previously raised interest rates in September. Officials signaled plans for another rate hike before year end. However, investors bet policymakers will hold rates steady at their late October meeting.

The mortgage rate surge comes just four weeks before the November 3 elections. A Reuters/Ipsos poll finished on Monday showed the cost of living remains the top issue for voters.

The poll showed President Donald Trump holds an approval rating of 32%, a record low. Meanwhile, consumer inflation hit 3.4% in August, remaining well above the Fed's 2% goal. High costs continue to squeeze household budgets nationwide.