Seven percent. That is where the average 30-year fixed mortgage rate stood in late September, above that line for the first time since January 2025. In late February it was under 6%. Same house, same down payment. Now, a bigger check every month.
The Fed raised rates in September. But the rise in mortgage rates has been building for months. Mortgages price off the ten-year Treasury, and the ten-year is near its highest level since 2007. Inflation is part of that. Consumer prices in August were 3.4% higher than a year earlier. Most of this year’s rise in the ten-year, though, shows up in inflation-protected Treasuries too, and the market’s gauge of expected inflation has moved far less. A long-term interest rate is a price for time, and that price is up about a percentage point this year. I think competition for capital explains a lot of it. Governments, companies, and the AI buildout all want long-term money at once. Lower inflation would help. It would not guarantee a return of cheap money.
That price of time sits under every house. In August I wrote about the estimated four-million-home shortfall in American housing. A rate decision cannot undo years of underbuilding, and many owners with low-rate mortgages still have a strong reason not to sell. Would-be buyers keep renting.
Landlords and tenants are both feeling it. According to Zillow, asking rents are up about 2.5% from a year ago, yet nearly 40% of its rental listings still carry a concession. If you pay rent, check what comparable places nearby are offering before accepting a renewal increase. For anyone buying or refinancing a rental, the rent has to carry more of the math: the price, the loan, and the income still have to work together. A property should not need a future refinancing to rescue the numbers.
Waiting to buy does not have to mean waiting to prepare. What you can set aside, and what you earn on it, belong in your plan. Whatever rates do next, a sound plan allows for it without depending on it.
Tellus is not a bank. Tellus is not FDIC-insured.
– Jeromee (JJ) Johnson, President
