The average 30-year fixed-rate mortgage hit 7.4 percent this week, the highest level since November 2023, according to Freddie Mac data released Thursday. The rate rose 12 basis points from last week's 7.28 percent, marking the seventh consecutive weekly increase and the third straight week above 7 percent.
This is the first time the rate has exceeded 7.4 percent since mid-November 2023, when it averaged 7.44 percent. The sustained climb reflects broader turmoil in global bond markets, driven by the ongoing U.S.-Iran conflict and persistent inflation worries.
Borrowing costs have spiked sharply since the U.S. and Israel launched strikes against Iran. In the week before the attack, the average 30-year rate was 142 basis points lower than this week's reading. The 10-year Treasury yield also jumped 130 basis points from the day before the war began to Wednesday's close, underscoring the market's reaction to geopolitical risk and higher energy prices.
President Trump, who campaigned on a promise to bring mortgage rates down to 3 percent, now faces a housing market that is moving in the opposite direction. In September 2024, when he made that pledge at the Economic Club of New York, the average rate was 6.35 percent. "Young people will be able to buy a home again and be a part of the American Dream," he said at the time.
As rates have risen through the spring, summer, and early fall, the president has repeatedly blamed the Federal Reserve. Last month, the Fed raised its benchmark interest rate by a quarter point, a move that Trump criticized. On Wednesday, he escalated his attacks, saying the central bank "would like to see the country do badly" while praising Fed Chair Kevin Warsh as "great." That tension echoes earlier friction between the White House and the Fed, as Warsh has defied Trump's demands for lower rates.
Later Wednesday, Trump acknowledged that higher mortgage rates are hurting the housing market but predicted they would fall once the conflict with Iran ends. "It hurts housing, but the rates are going to come down when the oil comes down," he told reporters. "The oil comes down as soon as we finish off with Iran, and that's going to be very quickly."
Oil prices remain elevated, with Brent crude trading above $103 per barrel as of Thursday afternoon. The administration has sought to project confidence in a swift resolution, but market analysts point to the Pentagon's deployment of 4,000 additional Marines and sailors as a sign that the conflict may not be short-lived.
Meanwhile, the OPEC+ decision to keep oil output steady for November has done little to ease price pressures. With inflation still running hot, bond investors are demanding higher yields, which directly pushes up mortgage rates.
The combination of high rates and elevated home prices continues to squeeze affordability, particularly for first-time buyers. The president's promise of 3 percent mortgages now seems distant, and the political fallout could be significant heading into the midterm elections. Senate Majority Leader Chuck Schumer has already signaled that Democrats are poised to retake the Senate majority, a prospect that could hinge on voter frustration over the economy.
