Mortgage Rates Top 7% For First Time In 20 Months

California’s housing market enters fall with mortgage rates back above 7% for the first time since early 2025, adding fresh pressure to buyers already stretched by near-$900,000 median prices. Nationally, existing-home sales slipped to a 14-month low in August even as inventory swelled to its highest level in over a decade, giving shoppers more room to negotiate. Builders are feeling the squeeze too, cutting prices and leaning on incentives as confidence hits a one-year low. Meanwhile, foreclosure activity is ticking up statewide, and Sacramento continues forcing slow-growth cities like Costa Mesa to approve new housing — a mixed picture of strain and slowly loosening supply.

In The News:

Freddie Mac — 30-Year Mortgage Rate Averages 7.03% (September 24, 2026) — The average 30-year fixed mortgage rate climbed to 7.03% this week, up from 6.95%, marking the first close above 7% in 20 months, according to Freddie Mac’s Primary Mortgage Market Survey. The 15-year rate rose to 6.42%. Freddie Mac noted the housing market remains supported by a solid labor market even as financing costs squeeze affordability heading into the fall selling season.

HousingWire — August existing home sales slip to 3.98 million annual rate (September 10, 2026) — National existing-home sales fell 2% in August to a seasonally adjusted 3.98 million units, the slowest pace since June 2025, per the National Association of Realtors. Inventory rose to 1.62 million homes, pushing supply to 4.9 months, its highest level in more than ten years. NAR chief economist Lawrence Yun said rising mortgage rates continue to weigh on buyer activity, though the median price still posted its 38th straight month of annual gains.

HousingWire — Foreclosure filings rise 13% year-over-year, South hit hardest (September 17, 2026) — ATTOM’s August report found 40,277 U.S. properties with a foreclosure filing, up 13% from a year earlier, as completed repossessions jumped 42% annually. California recorded 2,565 foreclosure starts, third-most of any state, and 589 completed foreclosures, second only to Texas. Volumes remain well below historical norms, but the steady annual climb signals more distressed inventory reaching investors and buyers this fall.

NAHB — Builder Sentiment Falls on Higher Interest Rates and Costs (September 16, 2026) — The NAHB/Wells Fargo Housing Market Index fell three points to 32 in September, its lowest reading in a year, as elevated rates and construction costs curb builder optimism. Western builder confidence lagged at 28. Thirty-eight percent of builders cut prices this month and 66% offered incentives, the most since December, as buyer traffic weakens nationwide, including across California’s new-home market.

HousingWire — Costa Mesa okays 2,300 homes as California pursues its lawsuit (September 25, 2026) — Costa Mesa’s city council approved a 2,300-unit development, including 920 affordable units, on a 110-acre former state hospital site, after California sued the city and four others in July for missing housing-element deadlines. Governor Newsom said California cannot solve its housing crisis while cities sit on their hands. Costa Mesa must still plan for 11,760 homes through 2029, and the approved project falls short of that mandate.