US 30-Year Mortgage Rates Climb to 7.40% in Seventh Weekly Increase
US mortgage rates have climbed for the seventh consecutive week, with the average 30-year fixed-rate mortgage rising to 7.40% as of October 8, 2026. This is up from 7.28% last week and 6.30% during the same period last year. Meanwhile, 15-year fixed-rate mortgages rose to an average of 6.73% from 6.60% a week ago and 5.53% a year ago.
The continuous climb in borrowing costs is severely dampening housing market activity. Mortgage applications have declined for five straight weeks as the 30-year rate reached a nearly three-year high. Homeowners are largely avoiding refinancing, driving refinance applications down to their lowest level since January 2025—less than half the pace recorded last year. Prospective home buyers are also pulling back due to the increased costs, which have risen by approximately 1.4 percentage points since late February.
Looking ahead, persistent high borrowing costs could impact the broader construction sector. If these rates remain elevated, residential construction payrolls may decline in 2027. Larger developers are facing higher borrowing costs from rising corporate bond yields, while smaller builders are being squeezed by recent interest rate hikes on short-term, floating-rate bank loans. Investors are monitoring mortgage-backed securities, with the iShares MBS ETF (MBB) slipping 0.07% and the Vanguard Mortgage-Backed Securities ETF (VMBS) down 0.08% following the news.
Key points
- 30-year fixed-rate mortgages rose to an average of 7.40% for the week ending October 8, 2026, marking the seventh consecutive weekly increase.
- Mortgage applications fell for the fifth week in a row as refinancing activity dropped to its lowest level since January 2025.
- Home borrowing rates have increased by about 1.4 percentage points since late February.
- Rising borrowing costs and high corporate bond yields could lead to a decline in residential construction payrolls in 2027.
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Why are US mortgage rates rising?
Mortgage rates have risen for seven straight weeks, with the 30-year fixed rate reaching 7.40%. This climb is part of a broader increase in borrowing costs, which have risen by approximately 1.4 percentage points since late February.
How are higher mortgage rates affecting home buyers?
Rising rates are causing prospective buyers to pull back and preventing homeowners from refinancing. Mortgage applications have declined for five consecutive weeks, and refinance applications have dropped to their lowest level since January 2025.
What is the outlook for the construction industry?
If high borrowing costs persist, residential construction payrolls could decline in 2027. Higher corporate bond yields are raising costs for large developers, while recent rate hikes are squeezing smaller builders who rely on short-term, floating-rate bank loans.