Real Estate News · October 2026

Why Mortgage Rates Are Rising — and What It Means for You

By Hallmark Realtors

Mortgage rates have climbed to their highest levels in well over a year, with the 30-year fixed pushing past 7.5% in recent weeks. The biggest driver has been an energy shock: the conflict involving Iran has disrupted oil shipments through the Strait of Hormuz, sending oil and gas prices sharply higher. Gas averaged a record $4.33 a gallon nationally in September, and headline inflation rose to 3.4% in August — well above the Federal Reserve's 2% target.

What's Driving Rates Higher

In response to rising inflation, the Fed raised its benchmark rate in September for the first time since 2023. While the Fed doesn't set mortgage rates directly, mortgage rates closely follow the 10-year Treasury yield, which climbed above 5.3% in early October as investors demanded higher returns to offset inflation. Historically, 30-year mortgage rates have run about two percentage points above that yield; since the pandemic, the gap has been closer to three.

What's the Outlook?

Most housing economists expect rates to stay elevated for the rest of 2026, with major forecasters such as the Mortgage Bankers Association and Fannie Mae projecting rates near 7%. The Fed's next meeting is October 28, and its own projections point to the possibility of one more increase before year-end. Much depends on oil prices and inflation: if energy costs ease, rates could follow, but if inflation stays hot, rates may remain stubbornly high. Rates have eased slightly in mid-October, a reminder that they can move quickly in either direction.

How It Affects Buyers and Sellers

On a $400,000 loan, the monthly principal and interest payment at today's rates is roughly $300 higher than it would have been a year ago — about $3,600 more per year. That's pushing some buyers to the sidelines and giving those who remain more negotiating power. Here in central New Jersey, inventory is up sharply from last year, yet well-priced homes are still selling at or above asking price (see the Central Jersey Market Update below). For sellers, that means realistic pricing matters more than ever, and offering concessions like a closing-cost credit or a mortgage rate buydown can help a listing stand out.

If you're buying, stay in close touch with your lender about your rate-lock options, and ask whether a buydown could lower your payment — you can always refinance if rates fall later. If you're thinking about selling, reach out anytime and I'll walk you through how today's rates are affecting buyers in your neighborhood.

Current Mortgage Rates

Here's where rates stood as of October 13, 2026:

Rate data sourced from Mortgage News Daily. Rates are subject to change daily and may vary based on credit score, loan amount, and other factors.

Try our helpful mortgage calculators →

Central Jersey Market Update

September 2026 vs. September 2025

Union County

Union County prices are up 4.0% from last year, and there are more homes for sale (total inventory up 41.6%). Homes are selling for 103.2% of asking on average, so well-priced homes continue to draw strong offers. Pending sales are down 19.6%, so buyers are taking a bit more time to commit.

Market temperature: Seller's market — 2.93 months of supply, up from 1.99 months a year ago.

Middlesex County

Middlesex County prices are up 1.4% from last year, and there are more homes for sale (total inventory up 24.0%). Homes are selling for 100.0% of asking on average, so well-priced homes continue to draw strong offers. Pending sales are up 1.1%, a sign of momentum heading into next month.

Market temperature: Balanced market — 4.01 months of supply, up from 3.27 months a year ago, when it was a seller's market.

Union County source: Realtors Property Resource® (RPR) Market Trends, Single Family + Condo/Townhouse. Middlesex County source: All Jersey MLS, Single Family + Condo/Townhouse (excluding adult communities); pending sales from RPR Market Trends. September 2026 vs. September 2025. Information deemed reliable but not guaranteed.

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This article is general information only and does not constitute financial or lending advice. The payment example is illustrative, based on Mortgage News Daily 30-year fixed averages of 7.46% (10/13/26) vs. 6.32% (one year earlier), principal and interest only. Consult your lender for current rates and terms.