US 30-year mortgage rate hits 14-month high
Borrowing costs rose for a third straight week, pushing the average 30-year fixed rate to 6.76%. This marks the highest level since June 2025 and adds significant monthly burden to new home loans.
The average rate for a 30-year fixed mortgage climbed to 6.76% this week. It rose from 6.71% in the previous week. This marks the third consecutive weekly increase. The level is the highest recorded since June 2025.
Freddie Mac reported the data on Thursday. One year ago, the average rate stood at 6.35%. Higher rates increase monthly payments for borrowers. This limits purchasing power for prospective homebuyers.
Short-term loan costs also rise
The average rate for 15-year fixed mortgages increased as well. It moved to 6.09% from 6.04% last week. A year earlier, this rate was 5.5%. These loans are often used by borrowers refinancing existing home debt.
Treasury yields drive mortgage pricing
Mortgage rates follow the trajectory of the 10-year Treasury yield. Lenders use this benchmark to price home loans. The 10-year yield reached 4.92% on Thursday. A week prior, it stood at 4.77%.
Yields have risen due to higher oil prices and inflation fears. The US Treasury Department intervened last month to address debt concerns. These factors pressure long-term bond yields upward.
Federal Reserve policy expectations shift
Inflation remains elevated, prompting pressure on the Federal Reserve. Fed Chair Kevin Warsh indicated the central bank may need to act. Traders now assign a 70% probability of a rate hike at the next meeting.
This probability rose from 61% the day before, according to CME Group data. While the Fed does not set mortgage rates directly, its actions influence bond investors. This ultimately affects the cost of borrowing for homes.
