U.S. 30-Year Mortgage Rate Rises to 7.12%, Highest Since May 2024
The average rate on a U.S. 30-year fixed-rate mortgage rose to 7.12% in the week ended September 18, marking its highest level since May 2024 and an increase of 15 basis points from the previous week's 6.97%. The rise in rates led to a decline in loan demand, with overall applications falling by 1.5%, refinance activity dropping 3% weekly and being down 62% year-over-year, while purchase applications fell slightly but remained 11% below last year’s pace. As fixed-rate mortgages became more expensive, borrowers increasingly turned to adjustable-rate mortgages (ARMs), with the ARM share of applications rising from 8.4% to 9.8%. The average rate on 5/1 ARMs decreased to 6.10%, still over a percentage point lower than fixed rates. Rising mortgage costs are linked to higher U.S. Treasury yields, influenced by inflation concerns and geopolitical tensions following recent strikes against Iran.
Topics: Federal Reserve housing market interest rates Treasury yields