It’s a warning that will raise alarms for homeowners with mortgages, and those looking to buy: the possibility of continued high mortgage rates.
The warning comes from the former Treasury Secretary, Larry Summers, who said in a speech in mid-October, that he thinks “it’s more likely that long [term] rates are going to go up rather than down, given the fiscal pressures on the economy (1).”
Summers, speaking at the Mortgage Bankers Association (MBA) annual conference, cautioned that increasing federal deficits could mean that mortgage rates will rise.
“One scenario is that growth continues more or less as it has for the last 20 years. If so, the current federal fiscal trajectory is unsustainable,” he said. This scenario would mean that the bond market “[hits] a wall,” Summer said, which in turn would impact the 10-year Treasury Yield, which influences mortgage rates (2).
According to U.S. Federal Reserve data, the average 30-year fixed mortgage rate sat at 6.19% in mid-October (3). This is lower than the average rate at the same time last year, which was 6.44%.
Mortgage rates have remained high since 2022, when the average 30-year fixed-rate mortgage climbed from 3.45% in January to 6.42% in December of that year; average rates have not fallen below 6% since.
Amid hot inflation in 2022, the Fed raised interest rates, and mortgage rates followed (the Fed does not set mortgage rates, but the interest rates set impact the mortgage rates that lenders offer). As mortgage rates hit highs not seen in decades, the housing market also saw increased demand and low supply, causing prices to surge (4).
High mortgage rates have remained a factor in the affordability crisis. New home sales have been slow in 2025, and Fannie Mae’s projections for U.S. total home sales in 2025 are lower than 2024 sales totals (5).
Predictions for where mortgage rates are heading for 2025 and 2026 are generally rosier than the picture painted by Summer. According to Fannie Mae projections, mortgages will fall to 5.9% by the end of 2026. However, rates may tick up before the end of this, with Freddie Mac projecting that December 2025 rates may climb back up to 6.4% (5).
