Average 30-year US mortgage rate rises to highest level in a year at 6.66%

The average long-term U.S. mortgage rate rose for the fourth consecutive week to its highest level in a year, another setback for prospective homebuyers hoping for a break from elevated home loan borrowing costs.

The benchmark 30-year fixed rate mortgage rate rose to 6.66% from 6.58% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.72%.

Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing power. As rates rise, that can lead prospective home shoppers to delay buying a home, one reason U.S. home sales have been sluggish this year.

Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate increased to 6.04% from 5.96% last week. A year ago, it was at 5.85%, Freddie Mac said.

Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

Rates have been mostly rising this year as the Iran war has driven crude oil prices sharply higher, fueling expectations of hotter inflation. That’s pushed up long-term bond yields relative to where they were before the conflict began in late February, causing mortgage rates to trend higher.

The 10-year Treasury yield was 4.66% at midday Thursday on the bond market. It was just 3.97% in late February, before the war broke out.

The average rate on a 30-year mortgage is now the highest it’s been since July 31, 2025, when it was at 6.72%. As recently as late February, the average rate dropped slightly below 6% for the first time since late 2022.

The latest increase in mortgage rates comes a day after the Federal Reserve left its key interest rate unchanged as it wrestles with how to tame stubbornly high inflation, which has been stuck above the central bank's 2% target for more than five years.

During the central bank's two-day monetary policy meeting this week, three regional Fed bank presidents dissented in favor of higher rates to combat high prices.

That's a signal that Fed members are no longer in lockstep on inflation and that their next move is not going to be a rate cut, said Anthony Smith, senior economist at Realtor.com.

“With the Fed signaling that its next move is more likely a hike than a cut, near-term rate relief looks unlikely,” Smith said. “Because oil remains the primary channel through which the Iran conflict feeds inflation, a de-escalation and a reopening of the Strait of Hormuz remains the clearest path back toward lower rates.”

The central bank doesn’t set mortgage rates, but its decisions to raise or lower its short-term rate are watched closely by bond investors and can ultimately affect the yield on 10-year Treasurys.

While average long-term mortgage rates remain lower than they were at this time last year, their upward trajectory has weighed on home sales this year. Seasonally adjusted sales of previously occupied U.S. homes were up 0.7% from January to June compared with the same period last year, but they’re still hovering close to a 4-million annual pace far short of the historic norm that is closer to 5.2-million.

The trend has extended the national housing market slump that began in 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low.

The latest data on mortgage applications show that the upward trend in mortgage rates has given some would-be homebuyers reason to pause.

Mortgage applications, which include loans to buy a home or refinance an existing mortgage, fell 6.4% last week from the previous week, according to the Mortgage Bankers Association.

"While incoming economic data will continue to shape the outlook for interest rates, elevated borrowing costs remain a challenge this summer for many prospective homebuyers,” said MBA CEO Bob Broeksmit.