The average cost for a 30-year fixed-rate mortgage rose 19 basis points to 7.49 percent for the week ending October 2, the Mortgage Bankers Association reported. Applications for mortgages fell 4.2 percent from the previous week, hitting their lowest level since February 2025 and dropping by nearly half since the start of the year.
"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," said Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, in a press release.
Mortgage rates are closely tied to US 10-year Treasury notes, which earlier this week hit a 24-year high of 5.3 percent amid surging oil prices linked to ongoing tensions with Iran. The yield on 30-year Treasury bonds rose to its highest level since 2002, reaching 5.7 percent on Wednesday.
Rates have jumped since late February, when the US and Israel first struck Iran, climbing 1.4 percent since then. Inflation, which has risen 3.4 percent from a year ago, is also adding pressure.
The rising costs come as voters head toward the congressional midterm elections that could decide the balance of power in Washington. According to a Reuters/Ipsos poll in late August, 47 percent of voters said the cost of living was the single most important issue. A separate Reuters/Ipsos poll in September found that only 17 percent of voters approved of President Donald Trump's handling of cost-of-living issues.