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, up from 6.95% a week earlier, according to Freddie Mac. It was the first reading above 7% since January 2025 and marked a fifth consecutive weekly increase.

Mortgage rates have climbed by more than a percentage point since late February, when they briefly fell below 6%. The rise has followed a sharp increase in the yield on the 10-year Treasury note, which strongly influences home-loan costs. Treasury yields have moved higher amid concerns about inflation, the size of the federal debt and energy-price increases linked to the war with Iran.

The Federal Reserve raised its benchmark interest rate by a quarter percentage point to a range of 3.75% to 4%, citing persistent inflation. A majority of Fed policymakers projected at least one more increase before year's end.

Higher borrowing costs are adding pressure to an already slow housing market. Existing-home sales declined 2% in August from July, according to the National Association of Realtors, while the median existing-home price was about $429,000. CBS News calculated that the roughly one-percentage-point rise since February would add about $276 to the monthly payment on a $400,000 mortgage.

Forecasts remain mixed. Some economists expect rates to rise further in the coming months, while Zillow projects they could ease to about 6.7% by year-end. Economists said the path will depend heavily on inflation, bond markets and energy prices.