The average long-term mortgage rate in the U.S. has increased for the fourth consecutive week, reaching its highest level in a year. This latest rise poses a challenge for homebuyers trying to navigate high borrowing costs.
On Thursday, mortgage buyer Freddie Mac reported that the benchmark 30-year fixed mortgage rate climbed to 6.66% from last week’s 6.58%. A year ago, the rate was at 6.72%. The impact on borrowers is significant, with higher rates potentially adding hundreds of dollars monthly to their expenses. This can restrict homebuyers’ purchasing power and cause many to postpone buying a home, contributing to sluggish home sales in the U.S. this year.
Rates on 15-year fixed-rate mortgages, typically preferred by those refinancing, also increased. They moved to 6.04% from 5.96% last week, having been 5.85% a year ago according to Freddie Mac.
Several factors influence mortgage rates, including the Federal Reserve’s interest rate policies and bond market investors’ expectations regarding economic conditions and inflation. Mortgage rates often follow the direction of the 10-year Treasury yield, a benchmark lenders use for pricing home loans.
Recently, rates have mostly been on the rise, driven by higher crude oil prices following the conflict in Iran that has heightened inflation expectations. This situation has pushed long-term bond yields higher compared to pre-conflict levels in late February, causing mortgage rates to increase.
On Thursday, the 10-year Treasury yield was at 4.66% in the bond market, up from 3.97% before the conflict started in late February. The average 30-year mortgage rate now matches the peak it saw on July 31, 2025, at 6.72%. In late February, for a brief moment, the rate dipped below 6% for the first time since late 2022.
One day before the recent mortgage rate adjustment, the Federal Reserve opted to leave its key interest rate unchanged. Although the Fed doesn’t set mortgage rates directly, its rate decisions influence bond investors and can affect the yields on 10-year Treasurys.
Despite remaining lower than their peak last year, the rising trend in long-term mortgage rates has adversely impacted home sales throughout the year. From January to June, sales of previously occupied U.S. homes increased by a seasonally adjusted 0.7% compared to the previous year. Yet, they hover around a 4-million annual pace, significantly below the historic average nearing 5.2-million.
The national housing market downturn, which started in 2022 as mortgage rates increased from pandemic-era lows, has been exacerbated by the current rate trends. In 2022, sales of previously occupied homes remained essentially stagnant, marking a 30-year low.