- US mortgage rates hit a 19-month high, with 30-year fixed rates at 6.95% this week
- Mortgage rates have risen for four consecutive weeks amid Fed interest rate hikes
- The Fed raised its key rate to 3.9%, signaling a possible increase to 4.1% soon
US mortgage rates have climbed to their highest level in more than 19 months, with the average rate on a 30 year fixed mortgage rising to 6.95% this week according to the mortgage finance company Freddie Mac's Primary Mortgage Market Survey (PMMS).
The Associated Press(AP) reported that the latest increase marks the fourth consecutive week of rising mortgage rates and comes as the US Federal Reserve raised interest rates for the first time since 2023 to tackle persistent inflation. The average 30 year fixed mortgage rate rose from 6.76% a week earlier, while the 15 year fixed mortgage rate increased to 6.26% from 6.09%.
The quarter-point increase lifts the Fed's key rate to about 3.9% and, over time, could result in higher borrowing costs for mortgages, auto loans and credit cards. In a set of quarterly projections, the Fed also signalled its rate-setting committee could raise it a second time to 4.1%, AP reported.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
ALSO READ: US Mortgage Rates Climb To 6.71%, Highest Since July 2025
The latest increase has further strained an already challenging US housing market, reducing the purchasing power of prospective homebuyers as borrowing costs rise, AP reported.
Freddie Mac stated that the 30 year mortgage rate stood at 6.26% at the same time last year, meaning the rate is now significantly higher than it was a year ago. The 15 year mortgage rate has also risen from 5.41% a year ago to 6.26%.
The increase in mortgage rates comes as inflation remains elevated and log-term bond yields have risen, factors that can influence the cost of home loans. Home shoppers holding out for relief from rising mortgage rates may be in for a long wait.
The US housing market has already been under pressure from high home prices, limited housing supply and elevated borrowing costs. AP reported that home sales have remained around historically weak levels, while pending home sales were down 4.7% from a year earlier.
Why Are The Mortgage Rates Rising?
AP stated that renewed inflationary pressure, higher oil prices and the ongoing US-Iran conflict have contributed to higher long-term bond yields, which in turn have influenced mortgage rates. The Fed's decision to raise its benchmark rate has also added pressure to the borrowing costs, although changes in the federal funds rate do not translate directly into an identical movement in 30 year mortgage rates. With the average 30 year mortgage rate now just below 7%, prospective buyers face higher monthly financing costs, potentially keeping some households out of the housing market.
The latest increase therefore adds another challenge for US households at a time when policymakers are attempting to bring inflation under control without significantly weakening economic growth.
ALSO READ: High Rates, Weak Demand: 6.77% Mortgage Rates Are Keeping US Homebuyers On The Sidelines
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
