US 30-year mortgage rate hits highest in nearly three years
TLT•The average US 30-year fixed mortgage rate rose 19 basis points to 7.49% in the week ended October 2, its highest since November 2023. Mortgage applications fell 4.2% from the previous week.
1. Mortgage rates climb
The average 30-year fixed-rate mortgage rose 19 basis points to 7.49% in the week ended October 2, the Mortgage Bankers Association said. Rates were last higher in November 2023. Mortgage rates are closely tied to the 10-year Treasury yield, which topped 5.3% on Monday.
2. Applications decline
Mortgage loan applications fell 4.2% last week from the previous week, while refinancing applications dropped sharply. MBA deputy chief economist Joel Kan said few homeowners had an incentive to refinance at current rates and that higher borrowing costs had caused many potential buyers to step back.
3. Inflation and rates
Home borrowing rates have risen about 1.4 percentage points since joint US-Israeli strikes against Iran began in late February. Inflation registered 3.4% in August by a measure targeted by the Federal Reserve at 2%; policymakers have signaled they expect another rate hike by year-end, although markets are betting they will not move at their upcoming meeting at the end of October.
