Freddie Mac 30-year mortgage rate rises to 7.03%

  • Freddie Mac reported higher average 30-year and 15-year fixed mortgage rates.
  • 7.03% was the 30-year rate on Sept. 24, up from 6.95% a week earlier.
  • The 10-year Treasury yield finished Sept. 25 at 5.17%.

Freddie Mac’s average 30-year fixed mortgage rate rose to 7.03% as of Sept. 24, up from 6.95% a week earlier and marking the fifth consecutive weekly increase. The 15-year fixed rate climbed to 6.42% from 6.26%, while the 30-year rate remained well above the 6.30% average from a year ago. The Federal Reserve (U.S. central bank) raised its benchmark rate by 25 basis points to 3.75%-4.00% on Sept. 16, citing resilient growth and elevated inflation, but mortgage rates are driven more directly by longer-term Treasury yields and mortgage-backed securities (bundles of home loans). The 10-year Treasury yield finished Sept. 25 at 5.17% after reaching higher levels earlier in the week, amid strong economic data, elevated energy prices, inflation concerns and heavy government borrowing. At 7%, a $300,000 30-year mortgage costs about $1,996 per month, compared with roughly $1,896 at 6.5%, before taxes and insurance. The resulting difference is about $100 monthly, or roughly $1,200 annually. Future mortgage-rate movements will depend heavily on whether long-term yields cool, with inflation expectations, government borrowing and the term premium remaining key factors alongside Federal Reserve policy.

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