As 30-year fixed mortgage rates in the U.S. creep well past 7%, prospective homebuyers are likely wondering how this will impact their ability to own a home. <\/p>\n\n\n\n
While mortgage rates are only one part of the equation, a July 2026 Neighbors Bank<\/a> study found that 72% of surveyed homebuyers put their home search on ice while waiting for better rates. <\/p>\n\n\n\n Zoocasa compiled data from the past 50 years to examine how mortgage rates impact homeownership by age, income, race and price. What we found is that young homeowners often get sidelined as rates rise, while lower earners appear to gain momentum when interest rates dip lower. Meanwhile, non-white Americans tend to feel the effects of mortgage rates more than their white counterparts.<\/p>\n\n\n\n \u201cThe rise in rates we\u2019re seeing now might look scary, but history shows it\u2019s not the first time rates have been this high, and it likely won\u2019t be the last,” Zoocasa’s Industry Relations Officer Brittany Kostov said. “The key is being aware of the market and how these changes might impact you\u2013that way you can find the right time to make your move.\u201d <\/p>\n\n\n\n Mortgage rates aren\u2019t controlled by a single entity, but they are often most heavily influenced<\/a> by the U.S. Federal Reserve, which sets its federal funds rate through eight<\/a> scheduled meetings annually. <\/p>\n\n\n\n The federal funds rate determines how much banks charge to lend or borrow from each other overnight, according to Investopeida<\/a>. When banks have more money than they need in a Federal Reserve Bank, that money can be lent to other banks in a shortfall.<\/p>\n\n\n\n When the federal funds rate is higher, it discourages borrowing by making it more costly. On the flip side, a lower rate can encourage more borrowing by making it less expensive. This directly impacts the housing market, with the federal reserve rate and 30-year fixed mortgage rates often moving in tandem. <\/p>\n\n\n\n For instance, on Sept. 16, the Federal Reserve Bank raised<\/a> its target interest rates by 0.25% to a target of around 3.75%-4%. The impact on mortgage rates was almost immediate, according to Freddie Mac data<\/a>. The average mortgage rate in the U.S. jumped from 6.95% on the week of Sept. 17 to 7.4% by the second week of October. That\u2019s the highest rate since November 2023, when the Fed was working to tamper down post-pandemic inflation.\u00a0<\/p>\n\n\nWho Controls Mortgage Rates? <\/h2>\n\n\n\n
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