US 30-Year Mortgage Rates Hit 6.95 Percent
The 30-year fixed mortgage rate rose to 6.95 percent, marking a four-week streak of increases. This level is the highest since late January 2025.
The average rate on a 30-year fixed home loan climbed to 6.95 percent. This figure represents a jump from 6.76 percent the previous week. Freddie Mac reported this data on Thursday. It is the fourth consecutive week of rising rates. The last time the average reached this level was January 30, 2025.
Borrowers face higher monthly payments as a result. A $400,000 loan now costs approximately $255 more per month than in late February. The rate dipped to 5.98 percent in February before climbing. This increase limits purchasing power for potential buyers. Many shoppers are delaying decisions due to these costs.
Bond yields drive rate hikes
Long-term bond yields guide mortgage pricing. The 10-year Treasury yield breached 5 percent on Monday. It stood at 4.94 percent during Thursday midday trading. In late February, this yield was 3.97 percent. Inflation expectations from surging oil prices are pushing these yields higher. The Federal Reserve raised its key interest rate Wednesday. This was the first increase in three years.
The Fed signaled that another hike may occur later this year. Bond investors closely watch these decisions. They influence the trajectory of long-term yields. Lisa Sturtevant of Bright MLS notes the impact. She says rates will likely stay at or above 7 percent. This creates a significant barrier for affordability. Prospective buyers are being sidelined by these financial pressures.
Housing sales remain stagnant
US home sales have been flat for the past year. They remain at a 30-year low. Sales slowed again last month. Pending home sales rose 0.3 percent from July. However, they fell 4.7 percent compared to August last year. The National Association of Realtors released this data Thursday. Pending sales serve as a near-term indicator of market health.
Home prices have risen sharply in recent years. A chronic shortage of homes worsens the situation. Years of below-average construction have limited supply. Many aspiring owners are priced out of the market. GN auto markets/housing: mortgage rates highlights this trend. Buyers continue to monitor rate movements. The market remains strained by high borrowing costs. Sellers face a challenging environment for closing deals.
