The Mortgage Bankers Association (MBA) announced that the average 30‑year fixed‑rate mortgage climbed to 7.49% in the week ending Oct. 2, marking the highest level since Nov. 2023. The rise came after the 10‑year Treasury yield topped 5.3%, reaching a 24‑year high.
Mortgage applications fell 4.2% last week, and refinancing requests plunged, leaving overall loan volume at its lowest since February 2025. The drop reflects a sharp decline in borrower demand as higher rates dampen affordability.
Economists point to a blend of factors: persistently high inflation, surging oil prices, and stronger-than‑expected U.S. economic data have pushed the Fed to raise rates in September. Joel Kan, MBA’s deputy chief economist, said very few homeowners see a refinance incentive at these levels.
The timing is politically sensitive. With the November 3 midterm election four weeks away, voters are weighing cost‑of‑living issues, while President Trump’s approval rating sits at a record low of 32%. Market watchers expect the Fed to pause rate hikes in October, but another increase by year‑end is still in play.
Analysts warn that the current trend could further squeeze the housing market, pushing more potential buyers into the sidelines and forcing lenders to tighten underwriting standards. The next Fed policy meeting, slated for late October, will likely be the decisive moment for mortgage‑rate trajectory.