The next morning, Fox News Channel co-host Bill Hemmer raised it with White House National Economic Council Director Kevin Hassett on America’s Newsroom. Hemmer pointed out that rates above 7% aren’t good for the housing market, and he asked for Hassett’s response.
Hassett replied that when the economy is growing fast, long-term interest rates can rise even without inflation. Businesses need a lot of money to build things like factories, so they borrow, and that can leave less money for people who want to take out home loans. As he put it, “People are building factories instead of maybe lending to homeowners.”
The bond market and the latest housing numbers suggest there’s more to the story.
What’s pushing mortgage rates up
The Federal Reserve doesn’t set mortgage rates directly. Mortgage rates generally move with the 10-year Treasury yield, which is the interest the U.S. government pays investors to borrow money for 10 years. Lenders use that yield as a benchmark when they price home loans. When it goes up, your mortgage rate usually goes up with it.
And many things push that yield up, including inflation, the Fed, and what bond investors think the economy will do next. This year, a lot of it traces back to oil. In late February, the average 30-year rate briefly dropped to 5.98%, the lowest it had been in three and a half years. Then the U.S. and Israel struck Iran, oil prices went up and mortgage rates rose right along with them.
Hassett’s argument is that business borrowing is adding to that pressure. Fox 9’s report on last week’s jump doesn’t mention factory borrowing. It ties the rise in rates to oil prices and the bond market.
What the housing data says
Hassett also told Hemmer the housing market looked strong over the summer. He said supply, purchases and permits were all way up from a year earlier. He added that the White House wants rates to come down and feels the pain of first-time homebuyers.
Permits back him up a bit. Builders got permits for more new homes in August than they did a year earlier. If they kept that pace for a whole year, they’d be approved to build about 1.39 million homes, 3.5% more than last year, according to the U.S. Census Bureau.
Home sales tell a different story. Fewer people bought homes in August — and that’s homes people already lived in, not new builds. Sales dropped 2% from July, and they were down 1.2% from a year earlier, to an annual number of 3.98 million. That’s the first time the number has dipped below 4 million since June 2025.
