The average rate on a 30-year fixed mortgage rose another 19 basis points to 7.49% in the week ended Oct. 2, reaching its highest level since late November 2023, according to the Mortgage Bankers Association.
The increase followed an 18-basis-point rise in the previous week and marked the seventh consecutive weekly increase. Over that period, mortgage rates have risen by a cumulative 140 basis points since late February.
Treasury Yields Push Borrowing Costs Higher
The latest increase followed another rise in U.S. Treasury yields, with both 10-year and 30-year yields reaching their highest levels since 2002.
Persistent energy-related inflation and expectations for additional Federal Reserve tightening have contributed to higher bond yields, which influence borrowing costs across the economy.
Mortgage rates tend to track longer-term Treasury yields rather than moving directly with the Federal Reserve’s policy rate. As a result, changes in expectations for inflation, economic growth and monetary policy can affect home-loan costs even before the Fed changes rates.
Mortgage Applications Fall for Fifth Week
Higher borrowing costs continued to weigh on mortgage demand.
Total mortgage applications declined 4.2% from the previous week, marking a fifth consecutive weekly decrease.
Refinancing applications fell 7.5%, while applications for mortgages to purchase homes declined 2.1%.
The latest figures show the impact of higher long-term borrowing costs on both existing homeowners considering refinancing and prospective buyers seeking financing.
