The average 30-year fixed mortgage rate climbed to 7.40% this week, up from 7.28%, reaching its highest level since November 2023.
A buyer borrowing $400,000 would pay about $294 more each month in principal and interest than at the average rate a year ago.
Mortgage applications are falling, while more sellers are cutting asking prices, giving some buyers additional negotiating room.
Mortgage rates rose again this week, putting additional pressure on homebuyers trying to make the numbers work in an already expensive housing market.
The average rate on a 30-year fixed mortgage reached 7.40% for the week ending October 8, according to Freddie Mac’s Primary Mortgage Market Survey. That compares with 7.28% last week and 6.30% a year ago. The average 15-year fixed mortgage rate increased to 6.73%, up from 6.60% last week and 5.53% a year earlier.
The increase was the seventh straight weekly rise. The 30-year average is now at its highest level since November 16, 2023, when it stood at 7.44%.
For consumers, the change translates directly into larger monthly payments or smaller homebuying budgets.
What it means
On a $400,000 mortgage with a 30-year term, the monthly principal-and-interest payment at 7.40% would be approximately $2,770. That is about $33 more than at last week’s rate and $294 more than at the 6.30% average a year ago.
Those calculations exclude property taxes, homeowners insurance, mortgage insurance and other expenses. Over a year, the difference from last October’s rate amounts to roughly $3,524.
The latest increase reflects pressure from the bond market. Mortgage rates generally follow the direction of the 10-year Treasury yield, which was around 5.29% at midday Thursday. Inflation concerns, higher oil prices associated with the Iran war and worries about government debt have helped push yields higher.
Borrowers are responding by pulling back. Mortgage applications decreased 4.2% on a seasonally adjusted basis in the week ending October 2, according to the Mortgage Bankers Association.
A new reality for sellers
At the same time, some sellers are adjusting their expectations. Redfin reported that 21.1% of sellers with active listings reduced their asking prices during the four weeks ending September 20. That was up from 19.8% a year earlier and the highest share for that time of year in records dating to 2022.
For buyers who can afford today’s financing costs, that creates an opportunity to negotiate. Redfin suggests considering offers below asking price on homes that have been listed for more than a month and requesting concessions toward repairs, closing costs or mortgage-rate buydowns.
Freddie Mac also emphasized that comparing offers from multiple lenders can potentially save borrowers thousands of dollars over a loan’s lifetime. Its weekly average is a benchmark; an individual borrower’s offer may differ.
For households considering a purchase, the practical test is whether the full monthly housing payment fits their budget at the rate they can secure today. Any future refinancing savings should be treated as a possibility rather than a requirement for making the home affordable.