In a blow to Americans in the market for a new home, the average long-term mortgage rate surpassed 7% this week for the first time in nearly a year, according to data released Sept. 24.
The average 30-year fixed mortgage rate jumped to 7.03%, according to Freddie Mac, a federal home loan lender. That’s up from 6.95% last week and 6.30% at this time last year.
Potential homebuyers now face the highest average 30-year mortgage rate since Jan. 16, 2025, when it stood at 7.04%. The rate is also at its highest level since President Donald Trump’s second term began.
The increase came about a week after Federal Reserve policymakers voted to raise their benchmark short-term interest rate to address stubborn inflation. While the two rates are indirectly linked, the 30-year fixed rate tends to follow the 10-year Treasury note’s trajectory instead. As of Sept. 24, the 10-year Treasury yield was hovering around 5%, according to Federal Reserve data, up from 4.16% at this time last year.
Several factors influence the bond market and mortgage rates, including inflation expectations. Those expectations have risen in part because of higher energy prices linked to the Iran war and other conflicts limiting the global oil supply. Jeff DerGurahian, LoanDepot’s chief investment officer and head economist, said oil prices and inflation are the market’s “primary focus.”
Mortgage Rates Keep Climbing
The average 30-year fixed mortgage rate has climbed for five consecutive weeks.
Homebuyers face long-term mortgage rates comparable to the highs seen over the last four years, with borrowing costs far higher than the historically low rates some borrowers secured during the COVID-19 pandemic.
As of Sept. 24, the average fixed rate for a 15-year mortgage was 6.42%, up from 6.26% last week and 5.49% at this time last year, according to Freddie Mac.
Rachel Barber is a reporter for USA TODAY. This article was distributed by USA TODAY Network via Reuters Connect.
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