WASHINGTON — The average rate on a 30-year fixed mortgage climbed to 7.49% last week, its highest level in nearly three years, as higher borrowing costs pushed homebuyers and homeowners seeking to refinance out of the market. President Trump blamed the Fed for not cutting interest rates.
The rate increased from 7.3% for the week ended Oct. 2, according to Mortgage Bankers Association data. The measure covers conventional loans with conforming balances of $832,750 or less. Rates were last higher in November 2023.
Total mortgage applications fell 4.2% from the previous week on a seasonally adjusted basis. Applications to purchase homes declined 2%, while unadjusted purchase activity was 15% below its year-earlier level, HousingWire reported. housingwire.com
Refinancing Takes A Hit
Refinance applications dropped 8% during the week and were 56% below the same period last year, according to HousingWire’s reporting on the MBA survey.
“Very few homeowners have an incentive to refinance at these rates,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. Kan said higher borrowing costs also were prompting prospective buyers to retreat.
Overall application volume reached its lowest level since February 2025 and has fallen nearly 50% since January, Reuters reported.
Affordability Pressures Mount
Purchase applications declined across all loan types, with applications for Federal Housing Administration loans falling 6%, MBA said. Some borrowers sought lower initial payments through adjustable-rate mortgages, which accounted for 10.3% of applications.
The average rate on a five-year adjustable-rate mortgage fell to 6.43% from 6.47%, even as fixed mortgage rates increased, HousingWire reported.
President Blames Fed
President Trump, meanwhile, criticized the Federal Reserve Board for not cutting interest rates.
“We should pay lower than any other country,” he said, adding the U.S. has made many countries rich but that they are not reciprocating.
For his part, Treasury Secretary Scott Bessent blames the spike on the “energy shock” from high oil prices during the Iran war.
“Once we get on the other side of the Iran conflict, the energy market is going to be well supplied and we will move down towards the Fed’s target, and mortgage rates, and the 10-year will come back down,” Bessent said.
