Mortgage rates reach 7.4%, a three-year peak

The typical 30-year fixed mortgage carried a 7.4% rate in the week through Oct. 8. That was the highest reading since mid-November 2023. Borrowing costs have risen for seven weeks running, making financed purchases harder to fit into household budgets. A year earlier, the average stood at 6.30%.

Higher bond yields have helped push home-loan rates upward. The 10-year Treasury measure averaged 5.28% this week after gaining 9 basis points. Inflation worries, government debt, energy costs and spending on AI projects have weighed on global bond markets. Federal Reserve Gov. Christopher Waller said additional increases are necessary to curb inflation, though he indicated they need not happen immediately or at back-to-back meetings.

The housing market was cooling before mortgages moved above 7%. Pending sales declined from year-earlier levels during August and September, while sellers cut asking prices at the quickest rate in four years. Available homes nationwide increased 6.7% from last year, but newly listed properties declined 4.1% last week. Buyers paying without financing have encountered lower prices and more choices: prices were down 1.4% annually, and the supply offered for sale rose 5.4%.