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By Giulia Carbonaro
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As the midterm elections draw closer, President Donald Trump’s pledge to lower mortgage rates and improve housing affordability is facing a harsh reality check: borrowing costs are now roughly where they stood when he took office nearly two years ago.
During his 2024 presidential campaign, Trump promised voters he would lower rates dramatically if elected, going as far as telling supporters in Arizona that he could bring them back to levels last seen during the pandemic-era housing boom.
“We will drive down the rates so you will be able to pay 2 percent again, and we will be able to finance or refinance your homes drastically at much lower costs,” he said during a rally in Tucson in September 2024.
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The average 30-year fixed-rate mortgage was 6.09 percent the week when he made that pledge, according to Freddie Mac — lower than it is today.
“President Trump has been laser-focused on making housing more affordable," White House spokesman Davis Ingle told Newsweek when asked for comment. "The president signed an executive order prohibiting large Wall Street firms from purchasing single-family homes, directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds that helped drive rates to four-year lows, and cut unnecessary red tape at a historic pace to boost supply, speed construction, and lower costs. The president will not stop fighting until the American Dream of homeownership is within reach for every American, which is why he continues to sign bold new executive orders and calls on Congress to pass further legislation.”
What Mortgage Rates Were When Trump Returned to the White House
During the week ending January 23, 2025, the same week Trump made his return to the White House, the national 30-year fixed-rate mortgage—the most popular home loan among American borrowers—averaged 6.96 percent, according to Freddie Mac’s data.
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This was below the peak of 7.79 percent reached in October 2023, the highest level reached after the Federal Reserve launched its aggressive rate-hiking campaign to slow the rise of inflation, but still roughly double the pandemic lows of 2 percent and 3 percent. In early January 2021, just before Joe Biden entered the White House, mortgage rates reached a weekly all-time low of 2.65 percent.
Between Trump’s inauguration and late February this year, when the U.S. and Israel launched joint strikes on Iran, mortgage rates were slowly falling down, despite occasional setbacks.
As of the week ending February 26, the 30-year fixed rate mortgage averaged 5.98 percent, having fallen below the 6 percent mark for the first time since early September 2022, based on Freddie Mac’s data.
Over the course of 2025, the Federal Reserve cut its benchmark interest rate three times (though likely not as much as the president would have liked it to), leading to the steady decline of mortgage rates until late February.
What Mortgage Rates Are Now
According to Freddie Mac, the average for a benchmark 30-year fixed home loan rose to 6.71 percent for the week ending September 3—the highest level since July 2025.
The increase reverses projections from late 2025, when analysts anticipated that rates would moderate to or below 6 percent by the end of this year. The root cause for this reversal can be traced back to the ongoing war with Iran, a conflict that has also brought up gas prices in the U.S. and has been linked to Trump’s plunging approval rating.
“The Middle East conflict has put upward pressure on oil prices, fueling inflation and pushing it further from the Fed’s 2 percent target,” Realtor.com senior economist Jiayi Xu said in a statement shared with Newsweek after mortgage rates reached 6.71 percent.
“When the conflict appeared to be nearing resolution, bond yields declined and mortgage rates followed suit,” she added. “But the latest escalation in Middle East tensions has driven oil prices higher, reviving inflation concerns and pushing yields and mortgage rates back up.”
What Higher Mortgage Rates Mean for Homeowners
Existing homeowners have been locked in place by higher mortgage rates, which have discouraged them from moving and putting their property for sale, contributing to low levels of inventory in much of the country.
“Americans are locked in place,” Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors (NAR), previously told Newsweek. “Many homeowners are locked in by the golden handcuffs of low-interest rate mortgages and do not have a motivating factor that would cause them to move, even if their home is no longer the ideal fit for them.”
But it is first-time buyers who have really taken the brunt of higher borrowing costs, making homeownership more expensive.
Buying a home in the U.S. at the current rate of 6.71 percent and the July median sale price of $407,730, according to Redfin, costs roughly $800 more per month than it did a few years ago, when borrowing costs were historically low, assuming a 20 percent deposit.
Can a President Actually Control Mortgage Rates?
Unlike tax rates or tariffs, the president has no direct authority over the interest rate lenders charge homebuyers, which means that Trump could have never lowered mortgage rates single-handedly.
This is why he grew increasingly frustrated with former Federal Reserve Chairman Jerome Powell, who refused to cave in to the president’s calls for aggressive rate cuts last year, arguing that rate decisions should be driven by inflation and economic data rather than presidential demands.
Mortgage rates are largely determined by financial markets, particularly the yield on the 10-year U.S. Treasury note, inflation expectations and investor confidence in the broader economy. While the central bank does not set mortgage rates, it influences borrowing costs throughout the economy and can affect Treasury yields when it raises or lowers its benchmark interest rate.
That does not mean presidents have no influence at all on mortgage rates. Fiscal and economic policies can shape the conditions that ultimately affect them, with policies that reduce inflationary pressures helping push long-term bond yields lower and consequentially lowering costs for borrowers.
On the other hand, policies that investors view as inflationary could have the opposite effect by raising Treasury yields and, in turn, mortgage rates.
How Trump’s Policies Have Shaped the Housing Market
Trump’s promise of 2 percent mortgages has not been realized, but borrowing costs did fall substantially during the first 13 months of his second term.
The average 30-year fixed mortgage declined from 6.96 percent during the week Trump returned to the White House to 5.98 percent for the week ending February 26, 2026, according to Freddie Mac. That represented a decline of nearly a full percentage point and brought the average below 6 percent for the first time since September 2022.
One potential reason, among others, the rates had been falling could be attributed to the Trump administration directing mortgage giants Freddie Mac and Fannie Mae to purchase $200 billion in mortgage-backed securities. Such purchases were intended to support demand for mortgage debt and reduce borrowing costs.
The improvement was real but temporary as the rates rose in March.
Throughout Trump’s second term so far, the administration has argued that its economic agenda would strengthen growth and ultimately improve affordability ( and it reiterated that point in February when the rates had decreased). But some analysts have warned that certain policies—including sweeping tariffs on its trade partners—could have the opposite effect by keeping borrowing costs elevated.
Industry groups and builders have warned that tariffs on imported materials risk raising construction costs at a time when the U.S. is already struggling with a housing shortage.
Geopolitical tensions have also played a role in sending rates back up, with the conflict in the Middle East fueling the kind of economic uncertainty that has sent mortgage rates back above 6 percent and nearing the 7 percent mark.
What’s Next for Mortgage Rates?
Realtor.com analysts do not expect mortgage rates to come down significantly this fall as the Federal Reserve is expected to bring its rate up at some point later this year.
The next Consumer Price Index (CPI) report, a measure of inflation, will be “critical” for the central bank’s decision, loanDepot Chief Investment Officer and Head Economist Jeff DerGurahian said in a statement shared with Newsweek.
“Inflation has remained elevated over the past four to six months, and if headline inflation is flat and core inflation increases by no more than 0.2 percent for the month, the Fed may decide it does not need to act. But if inflation remains elevated, a September rate hike becomes more likely, which could keep mortgage rates near current levels or push them higher,” he said.
“Not one for lengthy remarks or detailed guidance, Fed Chair Kevin Warsh declined to provide traditional forward guidance during his Jackson Hole speech last week. Still, the market heard a clear message: the economy is performing well, inflation remains elevated and the Fed is committed to returning it to 2 percent,” DerGurahian said.
“While Warsh did not explicitly commit to raising rates, his preference for using the federal funds rate as the Fed’s primary policy tool put a September hike more firmly back on the table, increasing the market-implied odds from about 35% to roughly 57 percent,” he added.
“The renewed escalation in the Middle East now adds another complication. Even if domestic inflation data improves, a sustained rise in oil prices could keep inflation concerns alive and make it harder for the Fed to remain on the sidelines.”
Update 09/09/2026, 05:05 a.m. ET: This article has been updated with comment from Davis Ingle.
Contact Newsweek editors on this story: Ben Kelly, Yannick Demoustier and Tony Phillips.
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