NEW YORK, NY — The average rate on the popular 30-year fixed mortgage moved above 7% on Thursday for the first time since May 2025, according to Mortgage News Daily. The reading reached 7.07%, up 10 basis points from Wednesday.
The increase adds to pressure on would-be buyers already facing expensive home prices and a choppy borrowing environment. Mortgage rates do not move in a straight line, but they often track shifts in the bond market, especially the U.S. 10-year Treasury yield.
Treasury Yields and Oil Prices Put More Pressure on Bonds
Mortgage rates generally follow the direction of the 10-year Treasury, which rose again Thursday. One reason was a surge in oil prices, which helped push yields higher and made bonds less attractive to investors.
That move came even as a wholesale inflation reading for August showed prices rising 0.4%, matching Dow Jones consensus estimates. In other words, the inflation data did not give the bond market much relief.
Mortgage News Daily Says the Bond Market Had a Rough Stretch
Matthew Graham, chief operating officer at Mortgage News Daily, said the bond market had been under strain for two days. He pointed to the market reaction to Treasury Secretary Bessent and a Treasury buyback announcement on Wednesday.
By Thursday, Graham said the overnight jump in oil prices and a muted response to the Producer Price Index kept pressure on bonds. That combination helped lift mortgage rates even higher.
Rates Have Climbed Since the Start of the Iran War
Mortgage rates have been rising since the start of the Iran war, according to Mortgage News Daily. The average 30-year fixed rate hit a low of 5.99% the day before the conflict began.
That shift shows how quickly financing conditions can change. Even without a change in home prices, a higher mortgage rate can significantly alter what a buyer can afford each month.
A $430,000 Home Now Carries a Higher Monthly Payment
For a buyer purchasing a $430,000 home, roughly the national median price, and making a 20% down payment, Mortgage News Daily said the monthly principal and interest payment is now $244 higher than it was at the end of February.
That comparison illustrates how rate increases filter directly into household budgets. For many buyers, the difference can decide whether a home fits comfortably within their spending limit or feels out of reach.
Homebuilder Stocks Fell After Another Weak Housing Sales Report
Shares of U.S. homebuilders were already moving lower Thursday after a monthly report on existing home sales showed sales falling while prices rose, even with more homes on the market. The weaker sales data added another sign of strain in the housing sector.
Higher borrowing costs can slow demand, and that often affects builders, sellers and buyers at the same time. With rates back above 7%, the market faces another hurdle as it heads deeper into the fall selling season.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
