U.S. Mortgage Rates Continue to Rise, Impacting Homebuyers

The average long-term U.S. mortgage rate has increased for the fourth straight week, reaching its highest level in a year. This presents a challenge for potential homebuyers facing higher borrowing costs. According to Freddie Mac, the 30-year fixed-rate mortgage rose to 6.66% from 6.58% the previous week. A year ago, the figure was 6.72%.

Higher mortgage rates can substantially raise monthly costs, reducing homebuyers’ purchasing power. As a result, many may delay buying homes due to increased rates. This has contributed to sluggish U.S. home sales this year.

The cost of 15-year fixed-rate mortgages also rose, now averaging 6.04%, up from 5.96% last week. A year ago, the rate was 5.85%, as reported by Freddie Mac.

Several factors influence mortgage rates, including the Federal Reserve’s interest rate policies and economic expectations concerning inflation. Rates are closely tied to the 10-year Treasury yield, which guides lenders in setting home loan prices. Due to the conflict in Iran causing a surge in crude oil prices, expectations for increased inflation have driven long-term bond yields higher, leading to rising mortgage rates.

The 10-year Treasury yield was 4.66% as of midday Thursday, up from 3.97% in late February.

The 30-year mortgage rates are now the highest since July 31, 2025, when they hit 6.72%. As recently as late February, they briefly dropped below 6% for the first time since late 2022.

The recent rise in mortgage rates occurred after the Federal Reserve kept its key interest rate unchanged. The Fed’s decisions are scrutinized by bond investors and can influence the yield on 10-year Treasurys, which impacts mortgage rates.

Despite being lower than they were last year, the upward trend in mortgage rates has hampered home sales in 2023. Seasonally adjusted sales of occupied U.S. homes increased by 0.7% from January to June compared to last year, yet they remain near a 4-million annual pace, falling short of the historic norm around 5.2 million.

The housing market downturn, which began in 2022 with rising mortgage rates from pandemic lows, continues. Sales of occupied homes remained flat last year, marking a 30-year low.