30-year mortgage rate increases
Mortgage rates climbed again this week, according to Freddie Mac’s latest Primary Mortgage Market Survey. The 30-year fixed mortgage rate averaged 6.34%, slightly higher than last week’s 6.3%.
It was 6.12% last year, and this shows how much more costly borrowing has gotten over time. Even with the small rise, it does make a difference to buyers who are trying to qualify for loans and pay for monthly payments.
Sam Khater, Freddie Mac chief economist, stated that while rates have risen this week, they are still under the 52-week average of 6.71%. He added that the recent decline in rates over the past few months has helped to put more buyers back into the market.
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15-year fixed rate also rises
Along with the 30-year rate, the 15-year fixed mortgage ticked up as well. It climbed to 5.55%, up from 5.49% a week ago. The 15-year rate was 5.25% last year, so borrowers are also paying more for shorter-term loans.
Although the increase may not seem like much, even small changes in mortgage rates can affect how much a buyer can afford. That’s why everyone is watching these weekly changes so closely.
Buyers are slowly returning
Despite the rise in rates, more buyers are coming back into the market. New data from the National Association of Realtors showed pending home sales rose 4% in August. That is much better than the 0.2% gain analysts had forecast.
This suggests that purchasers are becoming more confident, especially after the Federal Reserve recently cut policy rates for the first time in nine months. Softer borrowing rates earlier this summer gave numerous households the push to sign contracts.
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Affordability continues to be a prime concern
In spite of some heartening signs, housing affordability remains one of the biggest obstacles for American families. It’s said that only 28% of homes in the United States are affordable for a median household. Rising home prices, high interest rates, and flat wage growth are all part of the problem.
Treasury’s Bessent has said fixing the housing affordability problem will be high on his agenda this fall. Most experts believe this will be significant, as younger buyers and first-time homebuyers continue to struggle to find homes they can afford.
Why rates are unpredictable right now
Mortgage rates closely track 10-year Treasury yields, which move on how investors view the economy. At the moment, uncertainty in Washington, such as the risk of a government shutdown, is adding up.
Realtor.com senior economist Jiayi Xu stated that the timing of these challenges makes it especially difficult. She explained that if the government shutdown continues, it would affect markets, interest rates, and even Federal Reserve policy decisions.
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What this means for buyers and sellers
For buyers, higher rates mean smaller budgets and the need to shop more conservatively. Some will choose to wait, in the hope that rates will drop again sooner rather than later. Others are acting now, especially if they find a home that is right for them.
For sellers, it is a mixed blessing. While higher rates can cut down on the number of would-be buyers, falling rates earlier this summer encouraged more people to get back into the marketplace. That might be why some sellers are now dropping their prices to attract serious buyers.
Looking ahead
The real estate market is delicate. Rates are higher than they were a year ago but lower than the peaks that were reached earlier in 2024 and 2025. With economic uncertainty, government gridlock, and Federal Reserve decisions still looming, it is yet to be determined where mortgage rates will go from here.
For now, buyers and sellers are waiting and seeing. The silver lining is that demand hasn’t disappeared. In spite of affordability problems, lots of Americans still need or want to move, and that’s keeping the housing market active.
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