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Average U.S. mortgage rates climbed to their highest level since November 2023, with Freddie Mac reporting on Thursday that the average for a 30-year fixed mortgage rose to 7.28% from 7.03% a week earlier. The increase continues a trend of higher borrowing costs that are reshaping buyer budgets and housing-market dynamics.
Freddie Mac’s latest Primary Mortgage Market Survey showed the 30-year fixed rate at 7.28%, compared with 6.34% a year ago and just below the Nov. 22, 2023 average of 7.29%, according to the survey. Freddie Mac also reported that the average rate on a 15-year fixed mortgage climbed to 6.6% from last week’s 6.42%.
Why rates are rising
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Mortgage rates are influenced by several factors, Freddie Mac and market observers note. While the Federal Reserve’s policy decisions do not directly set mortgage rates, those rates closely track the 10-year Treasury yield; Freddie Mac’s release cited the 10-year yield hovering around 5.23% as of Thursday afternoon. Geopolitical developments and other market forces also affect Treasury yields and, by extension, mortgage pricing.
What economists say
“With mortgage rates on their current trajectory, the housing market continues to be supported by favorable economic conditions,” Sam Khater, Freddie Mac’s chief economist, said in the release accompanying the survey.
Realtor.com senior economist Hannah Jones highlighted the effect on buyers’ monthly payments and purchasing power. “The 30-year mortgage rate has risen nearly a full percentage point over the past year, dramatically affecting buyer budgets,” Jones said. She noted that the rise has added “more than $200 to the monthly principal and interest payment on a median-priced home, even as the median price has fallen year-over-year.”
Jones also emphasized that the headline rate does not capture the whole picture for individual borrowers. “Even in the same rate environment, most borrowers’ rates span nearly a full percentage point depending on their credit score, down payment and choice of lender, a difference worth roughly $28,400 in buying power,” she said. “Planning for both the market and their own financial profile can help buyers approach homebuying with confidence.”
Higher mortgage rates tend to reduce affordability and can put downward pressure on home prices and buyer demand, though the exact effect varies by local market and individual borrower circumstances. Freddie Mac’s survey provides a weekly snapshot of average rates, which lenders and consumers often watch as a gauge of borrowing costs.
