Mortgage Rates Surge Past 7% Threshold
The average interest rate on a 30-year fixed mortgage climbed to 7.03% for the week ending Sept. 24, rising from 6.95% the previous week, according to Freddie Mac’s Primary Mortgage Market Survey released Thursday.
This increase marks the first time mortgage rates have topped 7% since January 2025, Fox Business reported. The jump follows a period where experts had predicted sub-6% mortgage rates for the year, CNBC Select noted.
Alongside the 30-year fixed rate, the average rate on a 15-year fixed mortgage climbed to 6.42% from 6.26% the previous week, Fox Business reported.
Treasury Yields and Inflationary Pressures Drive Costs
Realtor.com senior economist Anthony Smith stated that rates entered the week just 5 basis points below the 10-year Treasury yield after jumping 19 basis points, the largest one-week move since April 2025.
The 10-year Treasury yield hovered around 5.1% as of Thursday afternoon and surged to a 19-year high of 5.11% on Wednesday, Fox Business reported.
Smith attributed the rate increase to inflationary pressure and Brent crude oil prices hovering above $100 per barrel, according to Fox Business.
Impact on Homebuyers and Market Conditions
A homebuyer purchasing a median-priced home of $410,700 with 10% down would pay $250 more per month, or $3,000 per year, compared to a 6% rate scenario, CNBC Select reported.
Realtor.com senior economist Jake Krimmel stated that rates are expected to remain high until the Iran war resolves, with resolution potentially lowering rates in February and March.
Krimmel cited the Iran War, rapid AI sector growth, global inflation, and a Federal Reserve rate hike from September 16 as factors putting upward pressure on rates, according to CNBC Select.
Navigating Financing and Credit Scores
Seventy percent of markets around the country are considered buyers' markets or trending toward that designation, according to Realtor.com.
Krimmel said buyers in difficult financing conditions may secure homes at prices lower than asking due to sellers cutting prices, providing rate buydowns, or covering closing costs, CNBC Select reported.
Experian data shows those with a credit score over 780 had an average mortgage rate of 6.85% on a 30-year fixed-rate mortgage as of September, while those with a score of 620 averaged 7.61%.