I live in Charlotte,NC. New home owner and been mowing our fescue grass for last 3-4 months. We had some rain and I noticed few mushrooms in our yard couple of weeks. I just mowed over it and last I noticed after a rain that we had mushrooms all through out the yard. From googling I understood that there is no easy way to clear it. There were so many and only thing I could think was to mow and clear them. But now I see few heads coming up again, whats the best way to clear these mushrooms? I usually cut at 3"height, should I just reduce the height to 2.5" will that help?
The "mushrooms" you see above ground are the reproductive part of the fungi which produce spores. Their growth is triggered by weather conditions (in your case, probably by the rainfall) and often only live for a few days before they decay naturally.
The part of the fungi that survives for years is entirely underground. The height at which you mow the lawn will have no effect on them.
Unless you are worried about pets or children eating them, they are not doing much harm. The underground part will be growing on some decomposing organic matter, such as dead tree roots left in the ground when the lawn was first made.
There are no safe and effective fungicides which will kill them. The only guaranteed way to get rid of them is remove and replace all the topsoil, hope the new soil is mushroom-free, and make a new lawn.
Note I wrote "mushroom free" not "fungus free". Fungi are an important part of the ecosystem of any soil, because the recycle dead plant material. Only a few of the hundreds of species that live in soil produce visible mushrooms or toadstools.