US Mortgage Rates Hit Three-Year High at 7.49 Percent
Average 30-year fixed mortgage rates reached 7.49 percent, driving a surge in home price cuts as borrowing costs hit their highest level since 2023.
The average rate for a 30-year fixed-rate mortgage in the United States rose to 7.49 percent for the week ending October 2, the highest level since November 2023. The Mortgage Bankers Association reported a 19 basis point increase, a sharp climb from a brief dip below 6 percent seen in February 2026. This surge is attributed to the onset of the Iran war, which triggered rising oil prices, inflation, and a global increase in bond yields.
High borrowing costs are shifting the housing market toward a buyer's market. Redfin data shows that approximately 21 percent of sellers reduced asking prices in the four weeks ending September 20, the highest share for that period since 2022. Realtor.com reports that price cuts have reached a four-year high.
Despite increased buyer leverage and fewer bidding wars, the high cost of borrowing continues to limit the pool of eligible buyers. This creates a divide between motivated sellers and homeowners who remain in their properties to keep low pandemic-era mortgage rates. The spike occurs four weeks before a general election to determine Republican control of Congress, elevating housing affordability into a significant economic and political issue.
