30-year fixed mortgage rate rises above 7% for first time since May 2025
The 30-year fixed mortgage rate surpassed 7% on Wednesday, reaching its highest level since May 2025. This increase followed a government announcement about the size of its next Treasury buyback program that fell short of market expectations. Smaller-than-anticipated buybacks reduced expected demand for bonds and pushed yields—and consequently mortgage rates—higher. Mortgage rates had already been climbing, with last week's rate at 6.85%, a record since June 2025. The rise is part of an ongoing trend driven by investor concerns over inflation and the federal budget deficit. Treasury bond yields have also reached multi-year highs amid rising consumer prices that remain well above the Federal Reserve’s target. Higher rates are influencing borrower behavior, with more opting for adjustable-rate mortgages (ARMs). ARM applications rose to 8.5% of total mortgage applications last week—the highest since June—while overall application volume dropped by 2.7%. Refinance activity has also declined significantly compared to the previous year.
Topics: Federal Reserve inflation interest rates Treasury buybacks