Trump Promised to Bring Mortgage Rates Down to 3% — Two Years Later, They Are at the Highest Since He Took Office: Economist Says 'I Would Be Extremely Concerned Right Now…'
Mortgage rates remain well above 7%, nearly two years after President Donald Trump said they could fall to 3% or lower.
Freddie Mac said Thursday that its Primary Mortgage Market Survey showed the average 30-year fixed-rate mortgage rose to 7.28% as of Oct. 1, up from 7.03% a week earlier and 6.34% a year ago.
The 7.28% rate is the highest 30-year fixed mortgage rate recorded by Freddie Mac since Trump took office on Jan. 20, 2025.
Sen. Mark Warner (D-Va.) also criticized Trump for the rising mortgage rates. “Another devastating effect of Trump’s economy: skyrocketing mortgage rates…,” said Warner in a post on X.
Marc Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget, wrote on X Thursday, "I would be extremely concerned right now if you told me mortgage rates were headed to 3%." He was responding to a post highlighting Trump’s 2024 comments on mortgage rates.
Trump’s 3% Comment
Trump made the remarks during an appearance at the Economic Club of New York on Sept. 5, 2024, while discussing housing affordability and interest rates.
"Reducing mortgage rates is a big factor. We’re going to get them back down to, we think, 3%, maybe even lower than that," Trump said during the event.
At the time, Trump said lower rates would help make housing more affordable and allow younger Americans to buy homes.
Rates Remain Elevated
The elevated rates have also raised questions about how much higher borrowing costs could go from here.
Cotality Chief Economist Selma Hepp said mortgage rates could reach 9% in a severe scenario if Treasury yields rise toward 6%-7%, but stressed that this is not her base case. Under current bond-market conditions, she expects mortgage rates to remain around 7% for some time.
Homebuilders are also adjusting to the affordability pressure. KB Home (NYSE: KBH) has used community-level price adjustments and a built-to-order model, while Lennar Corp. (NYSE: LEN) reported an average sales incentive rate of about 12% in the third quarter. Builders are also using mortgage-rate buydowns, seller concessions and products aimed at lower-income buyers.
Freddie Mac Chief Economist Sam Khater said, "With mortgage rates on their current trajectory, the housing market continues to be supported by favorable economic conditions."
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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