Mortgage rates have been climbing for five straight weeks. Compared to the start of the year, the weekly average rate is more than a full percentage point higher.
The average rate on a 30-year fixed-rate mortgage jumped 14 basis points to 7.26% APR in the week ending Oct. 1, according to rates provided to NerdWallet by Zillow. (A basis point is one one-hundredth of a percentage point.) We calculate our weekly average using daily APRs recorded over the past five business days.
If your goal is to buy a house in 2026, budgeting right now can feel like pulling out your fancy pants for a big event and realizing they no longer button. Sure, the change happened gradually over months. But that doesn’t make today’s pinch hurt any less.
If you’re determined to buy a house this year, it might be time to tailor your plans — or wait for a time when affording a house is a better fit.
Explore mortgages today and get started on your homeownership goals
Get personalized rates. Your lender matches are just a few questions away.Won't affect your credit score
Feeling the squeeze
Here’s why this pressure on your homebuying budget feels especially frustrating: It’s not your fault. You can save diligently, cut expenses and shop carefully, and still be at the mercy of economic forces beyond your control. Those forces, like stubborn inflation and a volatile bond market, are keeping today’s mortgage rates above 7%.
Higher mortgage rates chip away at your purchasing power. Back in January, the monthly average rate for a 30-year fixed-rate mortgage clocked in at 5.99% APR, according to rates provided to NerdWallet by Zillow. Say you’re borrowing $400,000 on a 30-year fixed-rate mortgage. The jump from January’s 5.99% APR to today’s 7.26% APR would add about $336 to your monthly payment — just to borrow the same amount of money.
If you’re determined to buy a house before the end of the year, the stakes are even higher to shop around for a mortgage lender. Get a rate quote from at least three different lenders to make sure you’re getting the best deal. A mortgage broker can shop around on your behalf.
🤓 Kate on Rates: October 1, 2026
How we got here
Behind higher mortgage rates is a bigger tug-of-war shaking up the bond market. Mortgage interest rates tend to track the yield on the 10-year Treasury note — essentially, the return investors demand for lending money to the U.S. government.
Today, that yield hit its highest level since 2002. Translation: Investors want to be paid a lot more to lend money long term.
Inflation is one reason. The Personal Consumption Expenditures report for August was cooler than expected, but prices were still up 3.4% from a year ago — well above the Federal Reserve’s 2% target for inflation.
Meanwhile, investors have more places to put their money besides the ol’ standby 10-year Treasury. The U.S. government is borrowing heavily, while tech companies are issuing corporate bonds to fund AI development and infrastructure, including data centers. To attract investors in a crowded market, bonds may have to pay higher yields.
Simply put: The bond market is spooked. Neither the U.S. government nor big tech is likely to slow its borrowing spree anytime soon. Meanwhile, the Iran war continues to strain global oil supplies, keeping inflation pressure alive. Higher bond yields are the result — and everyday home buyers are paying the price through higher mortgage rates.
Put it back on the rack
If the housing market feels like an uphill battle right now, it’s completely fine to pause your search during the typically slow fall and winter months. If you stop looking, you wouldn’t be the only one.
“This is the time of year when leverage usually shifts more toward buyers, but unexpectedly higher mortgage rates mean even fewer buyers are showing up than normal this fall,” Jake Krimmel, senior economist for Realtor.com, said in a news release.
Pausing your home search isn’t admitting defeat. It gives you space to recalibrate your homebuying budget, sharpen your priorities and enter the market more prepared for the next good property.
After all, it only takes one house to make the wait worth it.
Explore more on
