US 30-year mortgage rates rise to 7.49% as Treasury yields hit multi-decade highs

Seven consecutive weeks of mortgage rate increases

The average interest rate on a 30-year fixed-rate mortgage in the United States reached 7.49% for the week ending October 2, 2026, according to data released on Wednesday by the Mortgage Bankers Association. The figure represents an increase of 19 basis points from the prior week and marks the seventh consecutive weekly rise. The rate is at its highest point since the week ending November 10, 2023, more than doubling the borrowing costs paid by American home buyers during 2021. The increase further tightens financing conditions for prospective buyers across the country.

Bond yields and geopolitical pressures

Mortgage rates continue to track yields on United States government bonds, which have moved higher throughout the autumn. The 10-year Treasury note yield rose to 5.3% on Monday, its highest level in 24 years, while the 30-year Treasury bond reached 5.7% on Wednesday, the highest yield recorded on that security since 2002. Upward pressure on debt yields stems from stronger economic growth data and rising oil prices connected to military operations. Home borrowing costs have climbed by approximately 1.4 percentage points since joint US and Israeli strikes against Iran began in late February. In addition, US inflation registered at 3.4% in August, remaining above the Federal Reserve target of 2.0%. Following an interest rate hike in September, central bank officials indicated plans for one more increase before the end of the year, though financial markets do not expect a rate move at the Federal Reserve meeting in late October.

Sharp retreat in loan applications

Surging borrowing costs have caused home loan activity to contract sharply across the primary and secondary markets. Total mortgage applications dropped 4.2% in the week ending October 2 compared with the preceding seven-day period. Application volume now sits at its lowest point since February 2025, having decreased by nearly half since the start of 2026. Refinancing activity showed the steepest decline as higher borrowing costs eliminated financial incentives for existing owners to replace older mortgages. Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, explained the impact on market participation in a press release.

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.

Midterm election dynamics and voter priorities

The worsening housing affordability environment arrives four weeks before the congressional midterm elections on November 3, 2026. The vote will determine whether President Donald Trump and the Republican Party maintain control of the United States Congress. A Reuters/Ipsos poll completed on Monday showed Donald Trump holding a 32% public approval rating. In a separate Reuters/Ipsos survey conducted in late August, 47% of registered voters identified the cost of living as the single most important issue heading into the November vote. Furthermore, a Reuters/Ipsos poll in September found that 17% of respondents approved of Donald Trump's management of cost of living matters. International borrowing costs have also seen increases, with 10-year construction financing rates in Germany reaching approximately 4.25% in September according to Barkow Consulting, the highest level in that country since May 2011.