US mortgage rates top 7% for first time in 20 months
Increase comes after Fed decision to raise interest rates, as Americans struggle with high prices and stagnant wages US mortgage rates surpassed 7% for the first time since January 2025, according to federal lender Freddie Mac, aggravating a housing market that has endured years of high interest rates and low supply. The increase comes after the US Federal Reserve hiked interest rates , which…
Mortgage rates have climbed to 7%, marking the first time in 20 months, as reported by Freddie Mac. This surge occurred following the Federal Reserve's decision to raise interest rates on September 16th, reflecting the ongoing high inflation. The hike, a quarter-point increase to a range of 3.75% to 4%, is part of a series of anticipated rate increases this year, according to the Fed's committee.
Despite a previous downward trend in 2023, the 30-year mortgage rate has been inching upwards since late February, coinciding with heightened geopolitical tensions and associated inflation. The recent escalation in oil prices, with Brent crude surpassing $105, further fueled inflation concerns. The 10-year US Treasury yield, a key indicator for mortgage rates, reached its highest level since July 2007, and the 30-year Treasury yield peaked since 2004, signaling investor anticipation of additional rate hikes.
Economists note that the 7% threshold transcends mere numerical significance, coinciding with a period when the housing market typically transitions toward buyer favor. Anthony Smith of Realtor.com highlights that existing home sales reached a 2026 low in August, and pending sales have turned negative year over year. The escalating mortgage rates exacerbate the challenges faced by Americans, compounded by stagnant wages and rising living costs.
This economic strain is anticipated to impact the November midterm elections, with Republicans grappling to retain control of Congress. A recent CNN poll indicates that 75% of Americans disapprove of President Trump's economic management, and 66% of registered voters consider the economy to be of "extremely important" importance in their voting decisions.
Written by urgent.news from The Guardian US's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
