Average U.S. 30-Year Mortgage Rate Surges to 6.32 Percent

The average rate on a 30-year fixed mortgage in the United States jumped to 6.32 percent this week and borrowing costs are up from 6.27 percent just a week earlier.
Homebuyers are facing a limited supply of housing and higher-than-average market prices, according to the Federal Home Loan Mortgage Corp (FHLMC), or Freddie Mac.
Experts said promising trends in the U.S. economy—such as lower inflation and an uptick in jobs—will be crucial in staving off any temporary volatility.
“We should remember that the rise in rates is largely due to shifts in expectations and not the underlying economy, which has been strong for most of the year,” said Sam Khater, Freddie Mac’s chief economist. “Although higher rates make affordability more challenging, it shows the economic strength that should continue to support the recovery of the housing market.”
Mortgage rates are shaped by various factors, including the bond market’s reaction to the Federal Reserve’s interest rate moves.
Changes in the central bank’s policy can impact the 10-year Treasury yield—a key benchmark that lenders use to set mortgage rates.
On Thursday, the 10-year Treasury yield stood at 4.1 percent, a significant increase from 3.62 percent in mid-September, shortly before the Fed reduced its benchmark lending rate by half a percentage point.
Since March 2022, the central bank has raised rates seven times, leading to higher costs for loans across the board, including mortgages. This has created what analysts call the “lock-in effect”—people are afraid to let go of their lower rates, in fear of not finding something better and cheaper.
Elevated borrowing costs are aggravating affordability issues in the housing market, where homebuyers already face steep property prices and limited inventory. Home prices remain high despite some cooling.
The National Association of Realtors (NAR) reported the national median sales price rose 3.1 percent from a year earlier to $416,700 last month. In the meantime, sales fell by over 4 percent.
The average rate for a 30-year mortgage currently sits below the 7.22 percent peak it reached in May 2024. Since July, rates had mostly been trending downward, as markets anticipated the Federal Reserve’s decision last month to cut its main interest rate for the first time in more than four years.
The recent climb follows a period of significant volatility over the last few years.
“High mortgage rates are a double-edged sword for the housing market,” said Taylor Marr, real estate broker Redfin’s deputy chief economist. “They’re cutting demand because they make it less affordable to buy, but they’re also keeping inventory low because current homeowners don’t want to give up their low mortgage rates.”
Luckily, Fed officials have also indicated plans for additional, incremental rate cuts, which could come this year and continue into 2025 and 2026. If implemented, the cuts are expected to gradually reduce borrowing costs for homebuyers.
This article includes reporting from The Associated Press.