The average rate on the most common 30-year fixed-rate mortgage rose 19 basis points to 7.49% in the week ended October 2, according to the Mortgage Bankers Association (MBA). US mortgage rates have climbed to their highest level in nearly three years, making it more expensive for Americans to buy homes.
The elections will decide whether President Donald Trump’s Republican Party can keep control of Congress, Reuters reported. The sharp rise is putting more pressure on homebuyers, who now face higher monthly loan payments when purchasing a house. Inflation remains another major concern for the US economy . Higher inflation makes it harder for the Fed to lower interest rates and can keep borrowing costs elevated. Higher mortgage rates are already hurting demand for home loans. Refinancing activity also dropped sharply. The economic pressure is also coming at a difficult time for President Trump.
The 7.49% rate is the highest since November 2023. The rise comes just weeks before the November 3 US elections. Inflation stood at 3.4% in August, according to the measure targeted by the Federal Reserve. That is well above the Federal Reserve’s 2% inflation target. Mortgage loan applications fell 4.2% last week from the previous week, the MBA said. The cost of living is the biggest issue for many Americans ahead of the November 3 election. His approval rating stood at 32% in the Reuters/Ipsos poll, a record low among Hispanic voters, according to Reuters.
At current mortgage rates, homeowners who already have cheaper loans have little reason to refinance into a much more expensive loan, according to Reuters. Joel Kan, the MBA’s deputy chief economist, said very few homeowners have a reason to refinance at current rates. He also said the jump in borrowing costs has caused many potential buyers to pull back from the purchase market, as cited by Reuters.
A Reuters/Ipsos poll completed on Monday found that the issue is at the top of voters’ concerns.
