U.S. mortgage rates have climbed to their highest level in nearly three years, adding to affordability pressures for homebuyers as the cost of living emerges as a key issue ahead of November's midterm elections. The average rate on a 30-year fixed-rate mortgage reached 7.40 percent for the week ending October 8, according to Freddie Mac, as reported by Realtor.com, marking the seventh consecutive weekly increase. Rates rose from 7.28 percent the previous week and are now well above the 6.30 percent recorded a year ago.
"These elevated mortgage rates have the housing market spooked," says Realtor.com senior economist Joel Berner. The latest increase comes amid inflation concerns, a global bond market sell-off and worries about rising government deficits. Federal Reserve officials have also indicated that further interest rate increases may be necessary to bring inflation under control.
Newsweek contacted the National Association of Realtors on Friday via email for comment. For Americans hoping to buy a home, rising borrowing costs present another obstacle in a market already made difficult by elevated property prices. When President Trump took office in January 2025, the average 30-year fixed mortgage rate was 6.91 percent, according to a report by Freddie Mac.
As of September 2026, a typical U.S. home had a median listing price of $419,250, according to data from Federal Reserve and Realtor.com. Assuming that a buyer is purchasing a typical U.S. home taking on a 30-year fixed-rate mortgage with a 20 percent down payment, they are now paying an average of $246 more per month, or around $2,954 more per year than they were last year. Overall, compared to when Trump took office, they are now paying $111 more per month, or approximately $1,333 more per year, in principal and interest on their mortgage, assuming the same home price of $419,250 and a 20 percent down payment.
Higher mortgage rates mean buyers pay more to finance the same property, even when its purchase price remains unchanged. The increase can push monthly payments beyond what many households can comfortably afford, forcing prospective buyers to consider cheaper homes or delay purchasing altogether. Mortgage rates are influenced by several factors, including longer-term Treasury yields and expectations about inflation.
They do not move directly in line with the Federal Reserve's benchmark rate, although expectations of tighter monetary policy can put additional pressure on borrowing costs. The housing market has already shown signs of strain. Pending home sales fell year over year in August and September, while some sellers have been forced to reduce asking prices to attract buyers, according to Realtor.com.
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