Seven percent mortgage rates have returned to North Texas. The self-inflicted wounds from a the Trump administration keep piling up in 2026. While Republicans are busy begging to stay in power at the midterm convention in Dallas this week, yields on the 10-year Treasury bond are blowing out to 4.95 percent. Not surprisingly, mortgage rates also jumped above seven percent, hitting 7.07 percent in the 30-year fixed rate mortgage.

In a comically deluded fit of desperation, president Trump once again pitched the ruse of a $5,000 dividend check to every U.S. adult. Trump polished up the old broken promise with some new lies this time. Americans will only see that payment (NOT) if the GOP retains both the house and senate in the midterm elections.

The fact that Trump’s illegal tariffs haven’t generated nearly enough revenue to funds those payments wasn’t lost on those paying attention. The proposed dividend payments would add over a $trillion to the deficit, and cause even more inflation. Think eight percent mortgage rates and oil $140 per barrel. That’s no bueno for the U.S. real estate market, and basically a non-starter for anyone with a functioning brain stem.

The Mad King Stokes More Inflation

Trump’s insane attempt to bribe voters is the least of the worries for the housing market. We’re only a few basis points from a 5-handle on the 10-year Treasury yield. Rising mortgage rates were already choking off housing demand this summer. With oil above $100 and diesel prices at $6 per gallon, Americans are still getting buried by inflation. The Trump administration’s response is basically “Let them eat cake”. That along with an endless barrage of lies, gaslighting and childish trolling.

Producer prices are still running hot. U.S. consumers are still getting taken for a ride by high prices. The labor market remains anemic. August marked the fifth consecutive month where wage gains lagged the annual rate of inflation. Trump’s trickle-down inflationary policies continue to favor assets over labor. This K-shaped economy is not good for the overall housing market.

More Stagnation for Housing

The market stagflation continues here in North Texas. Home sales declined 9 percent across the DFW region in August. Pending sales contracts slid twelve percent. Median and average home prices were relatively unchanged from last year. Average home prices in Denton County were two percent lower compared to August of last year. Average prices in the city of Denton were 5 percent lower year-over year.

The home affordability gap for North Texas remains near cycle highs. Seven percent mortgage rates will only push those monthly payments toward the $4,000 mark. DFW home builders are responding by chopping prices and boosting incentives to keep the pipeline flowing. The country’s largest builders were already leaning heavily on FHA and VA loan products to help prospective buyers quality for homes. Those high LTV loan products have seen a rise in defaults and foreclosures this year.

Existing home sellers are a bit more complex. Some existing sellers are pulling their listings from the market if they don’t have to sell. Motivated sellers are doing what they have to. The competition for buyers gets real when inventory is plentiful. The good news is that homes are still selling when they are reasonably priced.

Where is that magic price point in Denton County Texas? For most of the year it has been round the $400,000 area. $400,000 was also the median new home price across Denton County in August. It’s worth noting this price does not include incentives from builders. Those incentives are not captured by the final reported sale price.

With mortgage rates at seven percent, it’s safe to assume there will be plenty of incentive spending this fall.