Why mortgage rates rose this week

By Justin Lazzaro, NMLS #1229453
Week of October 2, 2026

Average mortgage rates rose this week, according to Freddie Mac's weekly survey. The yield on 10-year U.S. Treasury bonds, which mortgage rates tend to follow, closed at 5.29% on Wednesday, up from 5.17% a week earlier, then eased to 5.24% on Thursday. That is a government bond yield, not a mortgage rate.

Inflation is still the main pressure. The Commerce Department's PCE price index, a broad measure of consumer prices, was up 3.4% from a year earlier in August, and 3.0% without food and energy. When inflation runs high, investors want higher yields on bonds, and mortgage rates follow. The Fed doesn't set mortgage rates, but what it signals about inflation moves them.

Friday's jobs report pointed the other way. Employers added 29,000 jobs in September, and July and August were revised down by a combined 60,000. Slower hiring can ease inflation pressure, which tends to help rates. That report came out after Freddie Mac's survey, so it isn't reflected in this week's average.

Home prices rose 0.3% in July and were up 2.6% from a year earlier, according to the Federal Housing Finance Agency.

What I'm watching next week: the minutes from the Fed's September meeting on Wednesday, and the weekly jobless claims report on Thursday. Minutes that lean toward more rate increases would likely push rates up. A jump in layoffs would likely ease them.

Buying or refinancing? Set a Low Rate Alert and I'll reach out when rates move toward your target. Looking at a home with an FHA loan? Read this week's Learning Center article.

Sources

This article is for general information only. It is not an offer to lend or a commitment to lend. Loan programs and guidelines change, and approval depends on credit, income, assets, property and program eligibility. Not all borrowers qualify. Market information is as of the date shown and comes from the sources credited. Any average rate mentioned is a national survey figure from its named source, not a rate offered by Reasy Financial, LLC or Justin Lazzaro. Justin Lazzaro, NMLS #1229453. Reasy Financial, LLC, NMLS #2446155, AZ BK 2012302. Equal Housing Opportunity.