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Posted on 09/15/2026 1:53:28 PM PDT by Angelino97
America's homebuyers had hoped the worst was over - but a steady stream of bad news is once again pushing the cost of mortgage credit higher.
Mortgage rates were expected to ease in 2026, giving buyers who had spent years locked out by punishing borrowing costs a reason to come back to the market.
Instead, the lending market data provider Bankrate estimates that the average 30-year mortgage rate has climbed back toward 7 percent, and investors have grown increasingly worried that the Federal Reserve may keep rates higher for longer - or even raise them again.
According to Nick Panize, president and CEO of Westgate Capital Ventures, we can blame the bond market.
Mortgage rates are closely tied to the US Treasury market, so when investors demand higher yields to hold government debt, borrowing costs for homeowners tend to rise too.
'Treasuries are priced by investors based on inflation, economic uncertainty, political turmoil, etc., which essentially reflects how safe or unsafe investors view the economic outlook,' Panize told the Daily Mail.
The war in the Middle East, stubborn consumer prices, mounting national debt and turmoil in the bond market have all added to concerns among investors, pushing Treasury yields higher and making mortgages more expensive.
Late 2023 was the last time average 30-year mortgage rates stayed firmly above this threshold, aside from a brief period in January 2025 when they reached 7 percent.
A jump in rates like this will certainly cause [prospective homebuyers] to pause,' Michael Fratantoni, chief economist at the Mortgage Bankers Association, told the Wall Street Journal. 'They may not go ahead and put in that contract or apply for the loan.'
(Excerpt) Read more at dailymail.com ...
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Oh geez, I got a 30 year mortgage in 1984. It was 14 1/4%. These people that say they can’t afford the interest rates are getting real old. People can’t afford housing because they can’t get spending priorities in line.
I’m not sure what I want to see here. Every sane economists says interest rates are low and the Fed should either be keep rates where they are or possibly ticking them down. But the Fed is signaling they’re getting ready to increase rates - and mostly to try to screw Trump’s chances in the midterms.
I think the results are mostly baked in and the Fed won’t change them. So part of me wants them to raise rates to give Trump more ammunition against the Fed - but that’ll hurt real people, so I’m on balance against it. If the Fed does the right thing here it will deflate Trump’s argument to overhaul the system.
The mortgage rates are not the whole problem. It’s the overinflated prices of homes that are the main problem. 7 percent on a $200,000 home is one thing. 7 percent on the same home priced at $800,000 is a different ball of wax.
For what dollar-sum was your mortgage?
Regards,
1992 it was 8 1/2 percent
my house is paid off, i’m thinking about a 2 million dollars home for my next upgrade.
i just need president trump to pump the ai stocks for me even more.
The last thing I am going to do is say that it’s not hard to make it in this economy, but yes, you are correct. Not only are mortgage rates near historic lows (excluding the extremely low blip during COVID) and, for instance, the fraction of a typical American’s paycheck that goes to food is much less now than in the 1980s, even though food prices are high. But we’ve adopted lifestyles where we give money to so many people who never even existed in the 1980s (ISP, cable provider, cell provider, etc., etc.) that it is hard. So many more creature comforts that in principle we could do without, but it is hard.
Your real question should be what was the ratio of your mortgage principal to your annual salary. They are probably pretty similar then and now.
Jesus, this old tired argument again? that’s wrong and you’re being intellectually dishonest or simply not thinking about the other factors.
So long as government spending and deficits are out of control interest rates will keep pushing higher.
OK, Boomer
Amen.
AI says in 1985 the median house value was $75,500 and the median household income was $23,620 - so about 3.2:1.
For 2026 it says $434,100 and $113,500 - so about 3.8:1.
Not the same, but not massively different, either.
Welcome to Iranian caused inflation.
“People can’t afford housing because they can’t get spending priorities in line.”
That’s a huge generalization that isn’t true in many cases. I see peoples credit reports every day.
Some of the younger people are the most conservative
Higher fixed interest rates will just chill home sales and perhaps bring values back closer to reality.
The bigger question is what is out there in variable rate mortgages - that will lead to foreclosures and bankruptcies.
“For what dollar-sum was your mortgage?”
It was about $40,000
My wife and I bought our first house with the GI Bill in 1971. The interest rate was 7.0% and we were fine with it.
I think another important way to assess this in real-world terms is to ask the question: what does this mean to me in actual cost.
In the 1980s almost all mortgages were 20 years. At 14-1/4% over 20 years, the total payments would be 303% of the initial principle - or in other words the interest payments alone would have been 203% of the initial principle.
Today, almost all mortgages are for 30 years. If we assume 8%, then the total payments would be 264% and the interest only payment would therefore be 164% of the initial principle.
So, if you decide your getting what you want, you’re paying the *BANK* a whole lot less, relative to the value of the house, now versus the 1980s. And at payoff you’d have had 20 years of value appreciation with a 1980s originated loan but will have 30 years of value appreciate with a loan originated today.
So, yes, as long as the economy keeps working, house purchases are a better invetment today versus the 1980s.
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