US Mortgage Rates Hit New High at 7%

Mortgage rates in the US have surpassed 7% for the first time since January 2025, according to data from Freddie Mac. The average rate on a 30-year mortgage rose to 7.03% as of September 24. This is a significant increase from late February when rates briefly dipped below 6%. The Mortgage Bankers Association also reported that these rates were 7.12% for the week ending September 18, which would be the highest level since May 2024.

Experts attribute this rise to stubborn inflation and the effects of the Iran conflict. Lawrence Yun, National Association of Realtors Chief Economist, predicts that 7% will become the new normal, citing job additions as a potential factor that can support homebuying. However, this increase follows a 0.25% interest rate hike by the Federal Reserve on September 16, which raised its benchmark rate into the 3.75% to 4% range.

The 10-year Treasury yield recently rose as high as 5.14%, its highest level since July 2007, partly driven by traders factoring in future Fed rate hikes and ongoing conflict in the Middle East. For homebuyers, mortgage rates surpassing 7% means less purchasing power, with larger monthly payments due to elevated home prices.