U.S. mortgage rates rise above 7% for first time in 20 months

The average rate on a 30-year fixed mortgage rose to 7.03% this week, crossing 7% for the first time since January 2025, according to Freddie Mac. The benchmark rate increased from 6.95% a week earlier and has now climbed for five consecutive weeks.

Rates have risen by more than a percentage point since falling below 6% in late February. Mortgage borrowing costs generally track the yield on the 10-year Treasury note, which has climbed amid concerns about inflation, rising energy prices and federal debt. Bond-market volatility has intensified since the war with Iran began, while the Federal Reserve raised its benchmark interest rate by a quarter percentage point in September. A majority of Fed policymakers projected at least one more increase before year-end.

The rise is adding pressure to a housing market already constrained by high borrowing costs and limited supply. Existing-home sales fell 2% in August from the previous month, according to the National Association of Realtors, while the median existing-home sale price was about $429,000. For a borrower financing $400,000, the roughly one-percentage-point increase since February adds about $276 to the monthly payment, CBS News reported.

Forecasts remain divided. Some economists expect rates to rise further in the coming months, while Zillow projects they could ease to 6.7% by the end of 2026. The path will depend partly on inflation, monetary policy and developments affecting energy markets and Treasury yields.