US 30-year mortgage rate rises to 7.4%, highest since November 2023, Freddie Mac says
In short
The average US 30-year fixed mortgage rate rose to 7.4% from 7.28% a week earlier, according to Freddie Mac data released on October 8 local time, the seventh straight weekly increase. It is the highest level since November 2023; a year ago the rate was 6.3%.
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The average US 30-year fixed mortgage rate rose to 7.4%, according to Freddie Mac data released on October 8 local time, China News Service reported from Washington. The rate was 7.28% a week earlier and 6.3% a year ago. China News Service said it was the highest level since November 16, 2023, and the seventh consecutive weekly increase. CLS, citing a Freddie Mac statement issued on Thursday, reported that US mortgage rates had risen for seven straight weeks for the first time in three years, adding pressure on an already weak housing market. [ 2 , 3 , 4 , 5 ]
China News Service reported that US mortgage rates are influenced by the Federal Reserve's federal funds rate and the 10-year Treasury yield, and that mortgage rates have climbed since the Fed raised rates on September 16. The 10-year Treasury yield rose to 5.29% on October 8, well above the 3.97% it stood at before the Iran war. The 30-year rate fell to 5.98%, a three-year low, on February 26 this year, and then trended upward for several months under the influence of the Iran war, the agency said. [ 4 ]
Citing an Associated Press calculation for a buyer of a $400,000 home, China News Service said the current rate is 1.42 percentage points above this year's low, which translates into a monthly payment $376 higher. It said US media believe rising mortgage rates weaken potential buyers' purchasing power, lead more of them to wait, and that the housing market slump will continue. [ 4 ]
CLS reported that mortgage rates back above 7% are worsening the US housing affordability crisis, an issue drawing more attention with less than four weeks to go before the midterm elections. Prospective buyers are squeezed both by high borrowing costs and by home prices still near record highs, it said. CLS quoted JPMorgan analysts as writing in a research note to clients on Wednesday that US housing affordability remains near its worst level since the global financial crisis and that the market has effectively frozen. [ 3 , 5 ]
Separately, Mortgage Bankers Association data showed the 30-year fixed mortgage rate jumping from 7.3% to 7.49%, CLS reported on October 7. According to association data published on October 7, mortgage applications, including purchase loans and refinancing, fell 4.2% in the week to October 2 from the previous week, the fifth consecutive weekly decline, China News Service reported. [ 1 , 4 ]
Why it matters
CLS reported that mortgage rates back above 7% are worsening the US housing affordability crisis, an issue gaining attention with less than four weeks to the midterm elections. China News Service cited US media as saying higher rates weaken buyers' purchasing power and that the housing market slump will continue.
Key facts
- Freddie Mac said the average 30-year fixed mortgage rate rose to 7.4%, from 7.28% a week earlier. [ 3 , 4 , 5 ]
- The rate has risen for seven consecutive weeks and is at its highest since November 2023. [ 3 , 4 , 5 ]
- A year ago the rate was 6.3%. [ 3 , 4 , 5 ]
- The rate fell to a three-year low of 5.98% on February 26 this year, China News Service reported. [ 4 ]
- The US 10-year Treasury yield rose to 5.29% on October 8, compared with 3.97% before the Iran war, according to China News Service. [ 4 ]
- Mortgage Bankers Association data showed the 30-year fixed rate jumped from 7.3% to 7.49%. [ 1 ]
- Mortgage applications fell 4.2% in the week to October 2, a fifth straight weekly decline, according to the Mortgage Bankers Association. [ 4 ]
Confirmed by several sources
Still unclear
- The Mortgage Bankers Association put the 30-year fixed rate at 7.49%, up from 7.3%, while Freddie Mac put it at 7.4%. The documents report both figures but do not explain the difference between the two measures.
- Whether this is the first seven-week run of increases in three years. Reported by CLS and republished by 36Kr; China News Service does not say so.
- JPMorgan analysts' view that US housing affordability is near its worst since the global financial crisis and the market has effectively frozen. Quoted only by CLS, and the quote is cut off in the document.
- Whether the housing market slump will continue. This is a view China News Service attributes to US media in general.
What local media are saying
Timeline, local time
- October 7: CLS reports Mortgage Bankers Association data showing the 30-year fixed rate jumping from 7.3% to 7.49%. [ 1 ]
- October 9: CLS reports Freddie Mac data showing the 30-year mortgage rate rose to 7.4% last week. [ 2 ]
- October 9: CLS reports the seventh straight weekly rise and its impact on housing affordability. [ 3 ]
- October 9: China News Service reports from Washington on the rate reaching its highest level since November 16, 2023. [ 4 ]
- October 9: 36Kr republishes the CLS report. [ 5 ]