30-Year Mortgage Rate Hits Highest Level in Over a Year
The average 30-year fixed mortgage rate rose to 6.71%, its highest since July 2025, as rising oil prices and bond yields push borrowing costs up.
The benchmark 30-year fixed mortgage rate increased to 6.71% this week, according to Freddie Mac, marking the highest average since July 31, 2025. The rate was 6.66% a week earlier and 6.50% a year ago. The 15-year fixed rate also climbed, reaching 6.04% from 5.98%.
Higher mortgage rates add several hundred dollars to monthly payments, limiting buyers’ purchasing power and contributing to a slowdown in home sales. Mortgage rates tend to follow the 10-year Treasury yield, which rose to 4.74% from 4.67% over the same period after climbing from 3.97% in late February.
Analysts attribute the recent increase to heightened oil prices linked to renewed U.S.–Iran tensions, which raise inflation expectations and push bond yields higher. Concerns about the growing U.S. debt have also pressured long-term yields, prompting Treasury Department intervention earlier this month.
Federal Reserve Chair Kevin Warsh told participants at the Jackson Hole symposium that inflation has not improved enough and that the central bank may need to take further action, hinting at a possible rate hike at the September meeting. While the Fed does not set mortgage rates directly, its policy decisions influence bond markets and, consequently, mortgage pricing.
"We don’t expect any real mortgage rate relief this fall, but if inflation isn’t tamed, the pain will be real," said Jiayi Xu, senior economist at Realtor.com. "Higher inflation would simultaneously erode paychecks and real income growth while keeping mortgage rates elevated for longer. That’s a squeeze on housing from both sides: what people can afford, and what they’re willing to buy into."