Mortgage Rates Smash 7% Barrier, Weighing on Struggling US Housing Market
US mortgage rates have breached 7% for the first time since January 30, 2025, putting additional pressure on buyers and sellers in a struggling housing market.
The average rate for a 30-year fixed-rate mortgage rose this week to 6.26%, up from 6.09% last week, while borrowing costs on 15-year mortgages also increased to 6.26% from 6.09%.
Higher mortgage rates can limit homebuyers' purchasing power and lead them to delay buying, as seen in the nearly 1 percentage point increase in the rate since late February, which translates to an additional $255 a month cost for a borrower financing a $400,000 home loan at the current average rate.
The housing market has been stuck in a rut this year due to rising borrowing costs, with mortgage rates influenced by inflation, Federal Reserve policy, and bond-market investors' expectations for the economy.