Mortgage rates surpass 7% as North Dakota offers relief programs for homebuyers
For the fifth consecutive week, mortgage rates have climbed higher. The 30-year fixed-rate mortgage reached 7.03% as of September 24, marking the first time rates have crossed the 7% threshold in 20 months, since January 2025.
The increase represents a sharp reversal from earlier this year. Rates briefly dipped below 6% at the end of February before rising more than a full percentage point in the months since.
While the uptick may discourage some buyers, economists say the trend has been building for years.
"We are at a 7% interest rate. I am not one bit surprised the market is where it is. The fact that we had a 3% mortgage rate on a 30-year rate just five years ago tells me that the inventory for new home buys, if you bought in the last five to 10 years, you're very unlikely to want to sell that home."
That phenomenon, known as the lock-in effect, has constrained housing supply nationwide. Nearly half of outstanding U.S. mortgages—49.9% in the first quarter of 2026—carried rates of 4% or less, making homeowners reluctant to sell and take on higher borrowing costs.
Multiple factors are driving rates higher. Inflation concerns and the size of the federal debt have pushed the 10-year Treasury yield sharply upward throughout 2026. The 10-year Treasury was hovering around 5% in late September, up more than a percentage point since late February. Mortgage rates tend to track Treasury yields closely.
The Federal Reserve also raised its benchmark interest rate by a quarter percentage point in September to a range of 3.75% to 4%, the first rate hike this year. Policymakers have signaled potentially one more increase before year's end.
Impact on buyers
The rate increases carry real financial consequences. A single percentage point increase in mortgage rates can cost buyers hundreds of additional dollars each month and tens of thousands over the life of a 30-year loan. For a borrower financing a $400,000 home, the roughly 1 percentage-point increase since February translates into an additional $276 per month.
Nationally, high mortgage rates contributed to a 2% decline in existing home sales in August compared to the previous month, according to the National Association of Realtors. The median price for an existing home was approximately $429,000.
In North Dakota, the median home price ranged between $290,642 and $346,510 in mid-2026, depending on the data source, with prices up between 1.39% and 6.2% year-over-year. The state had approximately 2,591 homes for sale in July.
State assistance available
Despite challenging conditions, North Dakota officials emphasize that help exists for buyers, particularly those purchasing their first home.
"Our first-time home buyer program, right now, rates are in the low sixes. That's 1% below market. That helps more people possibly get into that first home. We also have a down payment assistance program because not everyone has the cash for a down payment. You hear people say, 'Oh I need 20%.' Well, that's not true."
The North Dakota Housing Finance Agency operates seven programs designed to assist different populations and housing needs. The programs extend beyond first-time buyers to include renters and those experiencing homelessness.
The state's aging population creates additional housing pressures. North Dakota ranks seventh nationally for the highest proportion of residents age 85 and older, and rental housing specifically designated for older adults tends to have vacancy rates between 0% and 2%, much lower than the general market.
Dettlaff recommended that prospective buyers start by contacting their local bank, which will be familiar with available assistance programs. The Department of Housing and Urban Development also offers counselors to help locate appropriate resources.
More information about state housing programs is available at the North Dakota Housing Finance Agency website at https://www.ndhousing.nd.gov/.
