AP Business Writer Alex Veiga
The average US mortgage rate for 30 years has risen for the second consecutive week. This is another setback in the US housing market.
Mortgage buyer Freddie Mac said Thursday that long-term fees reached 6.75% to 6.75%, from 6.72% to 6.75%. A year ago, the price averaged 6.77%.
The borrowing costs for 15-year fixed-rate mortgages, which are popular for homeowners to refinance their mortgage, have also risen. The average rate rose to 5.92% from 5.86% last week. A year ago, that was 6.05%, Freddie Mac said.
When mortgage fees rise, you can add hundreds of dollars a month at borrower’s expenses, reducing purchasing power. This helped keep the US housing market in a poor sales date back to 2022. This is when mortgage rates began to rise due to the low rock bottom reached during the pandemic.
Last year, sales of previously occupied US homes sank to their lowest levels in nearly 30 years. Many future home buyers have been slowing so far this year as they are disappointed by the slow, but still rising mortgage rates and home prices.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ economic and inflation expectations.
The main barometer is the 10-year Treasury yield, which lenders use as a guide to mortgage pricing. Yield was 4.45% at noon on Thursday, down from 4.46% on Wednesday.
Returns have been moving significantly this month as traders bet that a June employment report that is better than expected will keep the Fed on hold on interest rates.
Bond investors temporarily pushed long-term yields on Wednesday after President Donald Trump discussed the “concept” of firing the Federal Reserve chair, but said it was unlikely to do so.
The president is asking Powell to cut interest rates. A non-independent Fed could mean a short-term rate drop, but could have the opposite effect on long-term bond yields that affect mortgage rates.
The average 30-year mortgage rate remains relatively high so far, slightly above the 7% this year set in mid-January. The low rate for the 30 years this year fell to 6.62% in early April.
The rise in mortgage rates seems to have discouraged some home shoppers. According to the Mortgage Bankers Association, mortgage applications fell 10% last week from a week ago, as economic uncertainty dampened demand.
Economists generally expect mortgage rates to remain relatively stable over the next few months, with forecasts hoping to keep the average mortgage rate for 30 years in the 6% to 7% range this year.
It roughly follows the historic average rate of a 30-year mortgage, but is a bit more comfortable for many home buyers after years of high home prices.
The median annual income for US households is approximately $80,000. However, with a mortgage rate of 6.75%, home buyers will need to earn approximately $130,000 per year to qualify for a loan to buy an average-price US home.
The rise in mortgage fees has also discouraged many homeowners who are far below mortgage fees from current sales.
This trend illustrates the US housing market that remains in slump this year.
“What does this mean for the housing market in the second half of 2025? It will probably remain a slow market,” Sturtevant said.
Original issue: July 17, 2025, 12:10pm EDT
