The Trump Golden Age of Affordability, prospective homebuyers!
The average long-term U.S. mortgage rate rose this week above 7% for the first time since January 2025, the latest affordability setback for prospective homebuyers following a five-week run of rate increases.
The weekly average rate on a 30-year fixed-rate home loan rose to 7.03% from 6.95% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.30%.
The average rate is now the highest it’s been since Jan. 16, 2025, when it was at 7.04%.
“Beyond the immediate financial constraints, the 7% threshold is a foreboding psychological barrier,” said Lisa Sturtevant, chief economist at Bright MLS. “Crossing this mark could create a chilling effect on the market” that would lead to a considerable slowing of home sales transactions this fall.
Higher mortgage rates can add hundreds of dollars a month to borrowers’ costs, limiting homebuyers’ purchasing power. As rates rise, that can also lead prospective home shoppers to delay buying. [snip]
The housing market has been stuck in a rut this year in large part because of elevated mortgage rates, which have been climbing in the months since the U.S. and Israel attacked Iran in late February.
Mortgage rates are influenced by inflation, Federal Reserve policy and bond-market investors’ expectations for the economy, among other factors. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans. [snip]
The latest increase in the 10-year Treasury yield suggests that “upward mortgage rate pressure seems likely to linger,” said Anthony Smith, senior economist at Realtor.com... (our emphasis)
More fallout from Trump's economic (tariff) policies and his war of choice, Operation Epic Quagmire!
(Image: Getty Images)
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