US mortgage rates have risen to their highest level in nearly three years, as concerns over the cost of living weigh on Americans less than a month before the midterm elections.
According to the Mortgage Bankers Association's (MBA) weekly report released Wednesday, the average rate on a 30-year fixed-rate mortgage rose 19 basis points to 7.49% in the week ending October 2.
The report also showed that mortgage applications fell 4.2% from the previous week, hitting their lowest level since February 2025 and down nearly by half since the start of the year.
"Very few homeowners have an incentive to refinance at this rate, and the surge in borrowing costs has driven many would-be borrowers out of the homebuying market," Joel Kan, MBA vice president and deputy chief economist, said in a statement.
Mortgage rates are closely tied to the yield on the 10-year US Treasury note. Earlier this week, the 10-year yield hit a 24-year high of 5.3% amid a sharp rise in oil prices driven by ongoing tensions with Iran.
Meanwhile, the yield on the 30-year Treasury bond climbed to its highest since 2002, reaching 5.7% on Wednesday.
Mortgage rates have been rising since late February, when the US and Israel first struck Iran. Since those strikes, mortgage rates have climbed another 1.4%. Inflation, which has risen 3.4% year on year, is also putting pressure on mortgage rates.
The development comes as the cost of living ranks as voters' top concern ahead of the midterm elections for Congress, a vote that could determine the balance of power in Washington. In a Reuters/Ipsos survey in late August, 47% of voters said the cost of living was the most important issue ahead of the midterms.
In another Reuters/Ipsos poll in September, 17% of voters said they approved of President Donald Trump's handling of cost-of-living issues.
