WASHINGTON, DC — Mortgage rates moved higher for the third week in a row, and the average rate on a 30-year fixed home loan reached 6.76 percent. That is the highest level in more than 14 months, according to Freddie Mac.
The latest reading was up from 6.71 percent a week earlier and well above 6.35 percent a year ago. The increase adds fresh pressure to buyers already facing a stubbornly weak housing market and a sales environment that has barely improved since rates surged from pandemic lows.
Thirty-Year Loans Reach the Highest Point Since Late June 2025
Freddie Mac said Thursday that the benchmark 30-year fixed rate mortgage is now at its highest level since June 26, 2025, when it stood at 6.77 percent. Even small weekly moves matter because homeowners and buyers often compare rates closely when deciding whether to move forward with a purchase.
Higher borrowing costs can translate into hundreds of dollars more each month for a typical borrower. That reduces purchasing power, meaning buyers may qualify for less house or choose to wait rather than stretch their budgets. For many households, the jump in rates can be the difference between making an offer and staying on the sidelines.
Refinance Borrowers Also Face Higher 15-Year Rates
The cost of a 15-year fixed mortgage rose as well. Freddie Mac put that average at 6.09 percent, up from 6.04 percent the previous week and higher than 5.5 percent a year ago.
Fifteen-year loans are often used by borrowers looking to refinance, so the increase makes it more expensive for homeowners hoping to lower monthly costs or pay off their loans faster. The rise means refinancing opportunities have become less attractive just as many households continue looking for any way to manage housing expenses.
With both major mortgage benchmarks moving up, the market is sending a clear signal that borrowing costs remain elevated rather than easing back toward the lower levels seen earlier in the decade.
Oil, Inflation, and Treasury Yields Are Pushing Borrowing Costs Higher
Mortgage rates do not move on their own. They are shaped by inflation, Federal Reserve policy, and expectations in the bond market, especially the direction of the 10-year Treasury yield that lenders use as a guide for pricing home loans.
Rates and bond yields have mostly risen this year because of the U.S. war with Iran, which has driven oil prices higher and increased concerns that inflation could stay sticky. Rising inflation worries tend to lift bond yields, and those yields often feed into mortgage pricing.
The 10-year Treasury yield reached 4.92 percent by midday Thursday, up from 4.77 percent a week earlier. Before the war in late February, it was 3.97 percent. That move has helped keep home-loan rates under upward pressure.
Growing Debt Concerns Have Added to the Bond Market Pressure
Worries about the U.S. government’s growing debt have also played a role in pushing long-term bond yields higher. That has become enough of a concern for the U.S. Treasury Department to step in last month.
When long-term yields climb, mortgage lenders often respond by charging more to make home loans. The result is that borrowers can face higher monthly payments even if the Federal Reserve is not directly changing mortgage rates itself.
The yield environment is notable because it has now reached levels not seen since late 2023, after the Fed had raised its key interest rate to help bring down inflation that surged after the COVID-19 pandemic. The bond market remains sensitive to any signs that inflation may stay above target for longer than hoped.
Wall Street Sees a Strong Chance of Another Fed Rate Increase
Attention is now turning to the Federal Reserve’s next meeting on Sept. 15 and 16. Fed Chair Kevin Warsh said late last month at the central bank’s annual economic symposium in Jackson Hole, Wyoming, that inflation had not improved enough and that the Fed might have “more work to do.”
That comment has helped fuel expectations that policymakers could raise the federal funds rate again. Traders on Wall Street are pricing in about a 70 percent chance of a hike next week, according to CME Group data, up from 61 percent the day before.
The Fed does not set mortgage rates directly, but its decisions matter because they influence bond investors and can eventually affect the 10-year Treasury yield. That chain reaction is one reason home buyers watch Fed meetings so closely.
A Slow Housing Market Is Still Feeling the Weight of Higher Rates
The housing market has been sluggish since 2022, when mortgage rates began climbing from the extremely low levels that followed the pandemic. Sales of previously occupied U.S. homes were essentially flat last year, hovering near a 30-year low.
That weakness continued this year. Sales of existing homes slowed again last month, showing that higher financing costs are still weighing on demand. For sellers, that can mean fewer buyers coming through the door. For buyers, it can mean more waiting, more budgeting, and fewer homes that fit within reach.
With rates up, yields rising, and inflation still a concern, the housing market remains stuck in a difficult stretch. Until borrowing costs ease, many households are likely to keep approaching home shopping cautiously.
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