US Mortgage Rates Average 7.40 Percent as the 30-Year Fixed Adds 110 Basis Points in a Year

The average rate on a 30-year fixed US mortgage reached 7.40 percent in the week to 8 October 2026, Freddie Mac reported, up from 7.28 percent a week earlier and 6.30 percent a year ago. The 15-year fixed averaged 6.73 percent, against 6.60 percent the previous week and 5.53 percent in October 2025.

What it means for a foreign buyer

If you are financing a US purchase, the cost of that debt is 110 basis points higher than it was twelve months ago, and the move is still in the wrong direction. On the survey rate alone, a borrower carrying a 30-year loan today pays materially more per month than one who locked in last autumn for the same principal. If you are mid-process on a purchase and your rate lock has an expiry inside the next few weeks, the arithmetic now favours closing on schedule rather than renegotiating terms, because each weekly survey this quarter has come in above the one before it. If you are shopping lenders, Freddie Mac's own chief economist Sam Khater made the only practical point worth repeating: collecting multiple quotes "can potentially save them thousands over the loan's lifetime."

The second consequence runs the other way and favours you. Sellers are losing pricing power as financed demand thins out. Joel Berner, senior economist at Realtor.com, reports that pending home sales fell year on year in both August and September, and that sellers are cutting asking prices at a rate not seen in four years. A cash buyer, or a buyer bringing a large deposit from outside the US, is negotiating into a weaker market than existed at any point in the past four years. That is the trade on offer: worse financing, better price and better leverage at the table.

One caution on reading the number itself. The 7.40 percent figure is not your quote.

What changed

The 30-year fixed moved up 12 basis points week on week, from 7.28 percent to 7.40 percent. The 15-year fixed moved 13 basis points, from 6.60 percent to 6.73 percent. The year-on-year gaps are the more significant figures: 110 basis points on the 30-year and 120 basis points on the 15-year.

The driver is the Treasury market rather than any policy announcement. The 10-year Treasury yield averaged 5.28 percent over the survey week, nine basis points above the prior week, and was trading near 5.22 percent on the Thursday afternoon of the release. Berner attributes the upward pressure to inflation expectations, a bond market selloff, and rising fiscal deficits that require new debt issuance.

The mechanism

There is no instrument behind this change. No decree was gazetted, no rule was amended, and no agency set the rate. The Primary Mortgage Market Survey is a weekly survey of lenders published by Freddie Mac, the government-sponsored enterprise, from McLean, Virginia. Its methodology averages the rates lenders offer from the prior Thursday through Wednesday, so the published figure is a lagging weekly average of offers rather than a snapshot of Thursday's market. That matters when the bond market is moving quickly, as it was in the survey week: the number you read on Thursday describes the week behind it.

The survey covers conforming loans to US borrowers. A non-resident foreign national buying US residential property generally does not qualify for a conforming loan and borrows instead through non-conforming foreign-national programmes, which are priced above the surveyed rate. Treat the PMMS figure as a floor and a direction indicator, not as a quote you can obtain.

Note also what does not drive this. Federal Reserve rate decisions do not set mortgage rates directly; they influence the short end of the curve, while the 30-year mortgage tracks the 10-year Treasury. The Fed raised its target range in September, its first increase since 2023, and the mortgage market has continued to move on Treasury yields and deficit supply since.

Context

The United States imposes no federal restriction on foreign ownership of residential property. A non-resident can hold title directly, and the constraints a foreign buyer actually meets are at the financing and tax layers rather than the ownership layer: qualifying for credit without a US income history, withholding on disposal under FIRPTA, and state-level restrictions that apply mainly to agricultural land and to buyers from specific countries. Financing cost is therefore the variable that moves most for this reader, which is why the weekly survey is worth watching. The 30-year average was near 7 percent in early September, before the autumn move in Treasury yields.

The backdrop is a market in which price and volume are weakening while the cost of borrowing rises. That combination is unusual, and it widens the gap between what a cash buyer and a financed buyer can achieve on the same property. North of the border the policy picture is different again, with the Bank of Canada holding at 2.25 percent while signalling it is ready to raise.