US mortgage rates hit their highest level in nearly three years as the average rate on 30-year fixed mortgages rose to 7.49%. The increase was 19 basis points in the week to Oct. 2, data from the Mortgage Bankers Association showed.
Higher borrowing costs have led to a further decline in demand. Mortgage applications fell 4.2% from the previous week to their lowest level since February 2025. Applications have fallen by almost half since the beginning of the year.
“Very few homeowners have an incentive to refinance at these rates, and rising loan costs have pushed many potential buyers out of the market,” said Joel Kahn, vice president and deputy chief economist at the Mortgage Bankers Association.Bond yields also rising
Mortgage rates are closely linked to the yield on 10-year U.S. Treasury bonds. Earlier this week, it hit 5.3%, the highest level in 24 years. The yield on 30-year government bonds rose to 5.7%, the highest level since 2002.
According to information from “Al Jazeera“ and Reuters, the increase is associated with rising oil prices and ongoing tensions over Iran. Since the end of February, mortgage rates have increased by 1.4 percentage points. Inflation, which rose 3.4% from a year earlier, is also putting additional pressure.
Housing market under pressure ahead of election
The new mortgage price hike comes less than a month before the midterm elections for Congress, when the cost of living is among the main concerns of American voters.
In a Reuters/Ipsos survey conducted in late August, 47% of respondents cited the cost of living as the most important issue in choosing a candidate. In a separate survey in September, only 17% approved of the way President Donald Trump is handling the cost of living issues.
The combination of high interest rates, more expensive government loans and inflationary pressures is limiting both homebuying opportunities and interest in refinancing. So far, mortgage bank data shows that households are reacting by postponing new deals.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg