Freddie Mac’s survey on Thursday, September 24 put the benchmark 30-year fixed mortgage at 7.03%, up from 6.95% a week earlier. It was the first reading above 7% since January 2025.
By the numbers, the previous week’s climb was already large. Realtor.com’s senior economist Anthony Smith said 6.95% represented a leap of 19 basis points, the biggest weekly move since April 2025. “A 7% handle is as much psychological as mathematical,” Smith said.
What pushed rates up
Mortgage rates track the 10-year Treasury yield more closely than they track the Fed. On Thursday that yield hit a level not seen since July 2007, while the 30-year Treasury yield hit its peak since 2004. Smith pointed to inflationary pressure and Brent crude hovering above $100 a barrel again. The Fed had lifted its rate on September 16, its first hike since 2023, and a majority of its committee expected another hike before year end.
The trend is not new. Rates had eased in 2025 from the 7.79% reached in late 2023, a generational high, then began creeping back up in late February, after the US and Israel launched their war with Iran. Treasury Secretary Scott Bessent tripled the government’s debt buyback earlier in September. Yields rose anyway.
The cost to a buyer
Redfin put dollars on it. On a $500,000 purchase with 20% down, principal and interest runs about $333 a month more than in late February, when rates briefly slipped below 6%. For a $1 million home, add roughly $666. The typical monthly payment sat near the highest in Redfin’s records.
The housing market was already sluggish. Existing home sales hit their 2026 low in August, and pending sales had turned negative from a year earlier, Smith said. Pay has lagged inflation too.
Where it went next
The rate did not retreat quickly. It briefly touched 7.4% in mid-October, a three-year high, and Freddie Mac later reported 7.24%, down from 7.32%. That made six straight weeks at or above 7%, the longest run since late 2023. Redfin found sellers outnumbered buyers by nearly 63% in September, the widest gap since its data begins in 2013, and the median US home-sale price fell for the first time in over three years.
Redfin senior economist Asad Khan called it ironic: “in terms of supply, these are some of the best conditions for buyers in many years,” but hardly anyone can afford to use them. Mike Fratantoni, chief economist at the Mortgage Bankers Association, said he saw no meaningful relief for mortgage rates across the forecast horizon.
Sources
- US mortgage rates top 7% for first time in 20 months (The Guardian)
- Mortgage rates top 7% for first time since early 2025 (Fox Business)
- Mortgage rates dip again, but the housing chill doesn't (Briefs)
