U.S. mortgage rates surged to their highest level in over a year, Freddie Mac says

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The benchmark rate rose to 6.71% this week, up from 6.66% last week, as inflation tied to the U.S.-Iran conflict keeps bond yields elevated

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Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.71% for the week ending September 3, its highest level since July 31, 2025, when it stood at 6.72%, according to WTOP.

The rate rose 5 basis points from 6.66% the previous week and is up from 6.50% a year ago, Freddie Mac said. The 15-year fixed-rate mortgage, a product frequently used by homeowners looking to refinance, climbed to 6.04% this week from 5.98% the week prior; a year ago that rate stood at 5.60%.

"Purchase demand has remained relatively stable indicating steady interest from buyers adapting to evolving market conditions," Freddie Mac Chief Economist Sam Khater said in a statement.

Mortgage rates track the 10-year Treasury yield, which has been rising in recent weeks, according to Reuters. The yield stood at 4.74% as of midday Thursday, up from 4.67% the prior Thursday and well above the 3.97% level that prevailed before the U.S.-Iran conflict began in late February, according to WTOP. A resumption of hostilities between the U.S. and Iran over the past week has sent crude prices climbing, intensifying inflationary concerns and sustaining upward pressure on bond yields.

Anxiety over the federal government's expanding debt load has likewise been a factor lifting long-term yields. Wednesday's session had driven the 10-year yield as high as 4.818%, a level not seen since November 1, 2023, but it pulled back Thursday after Fed Governor Christopher Waller suggested recent inflation data left him comfortable holding rates steady this month.

"Mortgage rates are not low, auto loans are not — rates are not low," Waller said at a Reuters Next event in Washington. "And if I see housing's in the tank, new cars have gotten almost to be a luxury instead of a normal thing that a middle class family can do — that's not loose financial conditions."

The current rate environment extends a climb that began earlier this year. The 30-year rate hit a then-one-year high of 6.66% in late July before pushing toward 6.75% in mid-August as the 30-year Treasury bond reached a 19-year high and inflation tied to the Iran conflict kept bond markets under pressure. U.S. home sales have lingered near a 30-year low as the housing market has struggled since 2022, when mortgage rates started rising from the record lows set during the pandemic.

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