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.
In late February, the average rate on a 30-year mortgage briefly dipped to 5.98%, its lowest level going back to late 2022. The roughly 1 percentage point increase in the rate since then translates roughly into an additional $276 a month cost for a borrower financing a $400,000 home loan at the current average rate.
Depending on a borrower’s income, credit and other factors, they may qualify for a rate on a 30-year mortgage that is below or above the current average.
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.
Expectations of higher inflation amid surging oil prices have pushed up the 10-year Treasury yield, which was at 3.97% in late February, before the war began. It surged to 5.17% in midday trading on the bond market Thursday. That’s put it roughly back to where it was in 2007.
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.
The Federal Reserve’s decision last week to increase its key interest rate for the first time in three years in a bid to tame surging inflation could also keep upward pressure on mortgage rates.
While the central bank doesn’t set mortgage rates, 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. The Fed also signaled that another rate hike could occur later this year.
Wall Street traders now see close to a coin flip’s chance that the Fed could raise rates twice more by the end of the year, according to data from the CME Group.
The U.S. housing market has been in a slump since 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. U.S. sales of those homes slowed again last month.
The latest data on home loan 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 1.5% last week from the previous week, according to the Mortgage Bankers Association. This marks the third straight weekly drop.
Applications for loans to refinance existing mortgages also declined, falling to their slowest pace since February 2025.
The latest move in rates on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, is likely to discourage some homeowners eager to refinance. That average rate increased this week to 6.42% from 6.26% last week. A year ago, it was at 5.49%.
The elevated mortgage rates are driving more prospective homebuyers to adjustable-rate mortgages, or ARMs. Such loans, which typically offer lower initial interest rates than traditional 30-year, fixed-rate mortgages, accounted for nearly 10% of all mortgage applications last week, MBA said.
For sale sign is seen outside of a home in Arlington Heights, Ill., Wednesday, Sept. 16, 2026. (AP Photo/Nam Y. Huh)
Israel's increasingly isolated Prime Minister Benjamin Netanyahu took center stage at the United Nations General Assembly on Thursday, defending his decision to attack Iran as an easy one.
Hamas said it was ready to move forward on a Gaza peace agreement, while a top European Union official said only a small amount of the funds needed to rebuild the Gaza Strip has been collected.
Here is a look at the latest news from the Middle East. More coverage of the U.N. General Assembly is available here.
Allegations of Israeli genocide in Gaza are “the biggest lie of the century,” Netanyahu told world leaders in a defiant speech before the U.N. General Assembly.
Netanyahu's appearance in the hall was met with a mix of cheers, boos and mass walkouts. Scores of delegates trooped out and a majority of seats sat empty as he spoke.
“If there are any other moral cowards who have not yet left the hall, please do so now,” Netanyahu said.
His voice rising in emphasis, Netanyahu said attacking Iran “was one of the easiest decisions I’ve ever had to make” and denounced as “moral cowards” delegates who walked out of the hall.
Palestinian President Mahmoud Abbas was forced to address the U.N. in a prerecorded video after the United States again denied him a visa to attend the General Assembly.
The 90-year-old leader’s popularity at home and relevance abroad have both waned. But in his remarks, Abbas made clear he did not intend to quietly accept being sidelined.
“We will not leave our homeland. We will not accept displacement. And we will not allow anyone to decide our future on our behalf,” Abbas said.
Though world leaders have repeatedly invoked the plight of Palestinians in speeches throughout the week, Abbas urged the international community to take more tangible action against Israel.
It was the second straight year Abbas was denied a visa.
A Hamas spokesman said the group is ready to move forward with the next steps of a peace agreement, after Trump’s Board of Peace unveiled a six-month, $2.45-billion plan for Gaza's reconstruction.
Hamas spokesman Hazem Qassem expressed the Palestinian militant group’s “full readiness to implement the Board of Peace’s roadmap” but made no mention of any disarmament plans.
Israel has said it will not allow reconstruction until Hamas disarms.
Last year, Hamas agreed to a plan that includes disarmament but has since traded accusations with Israel of ceasefire violations and has accused Israel of violating the agreement by continuing to occupy much of Gaza.
A top EU official said only 1 billion euros ($1.1 billion) has been raised out of the 71 billion euros ($80.8 billion) that the United Nations, the World Bank and the 27-nation European Union estimate are needed to rebuild Gaza.
Iran-backed Houthi rebels in Yemen say they have fired dozens of ballistic missiles and drones on Saudi Arabia’s southwestern Jazan province.
Houthi military spokesman Brig. Gen. Yahya Saree said the rebels targeted operations rooms, command centers, weapons depots and other Saudi military sites. He didn’t say when the attacks took place.
The Associated Press could not independently confirm the Houthi claims.
A Saudi military spokesman, Maj. Gen. Turki al-Malki, said six ballistic missiles targeting Saudi Arabia ’s Red Sea port of Yanbu and southwestern city of Taif were intercepted.
At the U.N., Saudi Arabia's foreign minister, Prince Faisal bin Farhan, said he wasn't worried about a Houthi takeover of parts of Yemen, and that the government is “very capable of defending the territory it controls.”
Asked about the U.S. decision to not get militarily involved against the Houthis, the prince deflected. He also refused to say whether Saudi Arabia would join the Abraham Accords, saying that the full implementation of the Gaza peace plan must happen before anything else.
The U.N. pleaded for the fast delivery of humanitarian aid in Yemen as fighting between Iran-backed Houthi rebels and Saudi-backed government forces intensifies an already dire humanitarian situation.
U.N. Human Rights Chief Volker Türk said people fleeing violence need access to food, shelter and healthcare. Ground fighting, artillery and aerial strikes have killed and wounded at least 125 civilians since the beginning of August. Türk also called for the release of 73 U.N. staffers detained by the Houthis in the past few years.
This report will be updated throughout the day as new developments emerge.
Palestinians walk amid war-damaged buildings in Gaza City, Wednesday, Sept. 23, 2026. (AP Photo/Jehad Alshrafi)
Israeli Prime Minister Benjamin Netanyahu at his Likud party New Year event in Tel Aviv, Israel, Thursday, Sept. 17, 2026. (AP Photo/Ariel Schalit)
