Mortgage rates rose again and accumulated three weeks in a row. Average 30-year fixed loans reached 6.76%, its highest level in more than 14 months, in a new blow to buyers and for a real estate market that remains virtually stalled.
This was by Freddie Mac. The 30-year mortgage rate rose from 6.71% the previous week to 6.76%. Compared to a year ago, when it was at 6.35%, the cost of financing also shows a significant increase.
The current level is the highest since June 26, 2025, when the average rate reached 6.77%.
The rise in mortgage rates has a direct impact on people looking to buy a home. A higher rate means that a greater portion of the monthly payment is spent on interest, which reduces the budget that buyers can spend on the property.
For many families, the scenario may mean looking for a lower price home, increasing the initial payment or postponing the purchase until financial conditions are more favorable.
This situation also helps explain why housing sales in the United States remain practically stalled during this year.
The burden of financing was not limited to 30-year loans. The average rate of 15-year fixed mortgages increased to 6.09%, up from 6.04% last week. A year ago, this type of loan had an average rate of 5.50%.
15-year mortgages are often used by owners seeking to refinance their loans, so the increase also makes this type of operations difficult.
Mortgage interest rates are determined by several factors. These include inflation, the Federal Reserve’s (Fed) monetary policy decisions and investors’ expectations on the U.S. economy.
One of the most important indicators is the yield of the 10-year U.S. Treasury bond, which often serves as a reference for determining the price of mortgages.
When the yield of these bonds increases, mortgage rates tend to move in the same direction.
During this year, both mortgage rates and bond yields have been under pressure to rise, in part due to the US-Iran war and rising oil prices.
The rising crude price raises concern because it can raise inflationary pressures again. Faced with more persistent inflation, investors can anticipate that the Federal Reserve will maintain a more restrictive monetary policy.
The 10-year Treasury bond yield reached 4.92% on Thursday noon in the bond market. A week earlier it stood at 4.77%, while at the end of February, before the war, it was 3.97%. Performance is now at levels not seen since the end of 2023.
Another element that is pressuring bond yields is the growing U.S. government debt.
Worry among investors about government financing needs has contributed to increased long-term bond yields. This situation led the U.S. Treasury Department to intervene last month.
A combination of high inflation, rising oil prices and concerns about public finances keeps the debt market under pressure.
The inflation behavior also increases pressure on the Federal Reserve, which has among its main goals to keep price growth under control.
When inflation is too high, the central bank tends to resort to increases in its reference interest rate. Although the Fed does not directly set mortgage rates, its decisions have a significant impact on financial markets and investor expectations.
Federal Reserve Chairman Kevin Warsh noted at the end of last month at the Fed’s annual economic symposium in Jackson Hole, Wyoming, that inflation had not shown sufficient improvement.
Warsh said the central bank could have “more work to do,” a sign that the monetary authority is evaluating the possibility of raising rates again. The next meeting of the Federal Reserve is scheduled for September 15 and 16.
Financial operators’ expectations have also changed in recent days. According to CME Group data, Wall Street operators now calculate a near-70% probability that the Federal Reserve will raise the rate of federal funds during its next meeting. A day earlier, this probability was estimated at 61%.
An eventual rate hike by the Fed could create new pressures on bond yields and, indirectly, on the cost of mortgages in the United States.
The U.S. real estate market has faced difficulties since 2022, when mortgage rates began to rise after reaching lows during the COVID-19 pandemic.
The worsening credit reduced consumer purchasing capacity and led to a sharp slowdown in real estate operations.
Used housing sales in the United States remained virtually stable over the past year and ended at their lowest level in 30 years.
The landscape has not changed significantly this year either. Last month, second-hand housing sales slowed again.
With 30-year mortgages again close to 6.8%, U.S. buyers face a market where financing a home continues to be considerably more expensive than during the ultra-low rate stage of the pandemic.
As long as inflation continues to raise concerns and bond yields remain high, the cost of mortgages could continue to be one of the main obstacles to the recovery of the U.S. real estate market.
