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Economy — Banking

What Does A 7% Mortgage Rate Mean For US Homebuyers

Higher borrowing costs are reducing homebuyers’ purchasing power.

,   and  TIPP Staff
2 min read
Photo by Tierra Mallorca / Unsplash

Mortgage rates in the U.S. have climbed above 7% for the first time since January 2025, adding pressure to an already weak housing market, according to CNN and Freddie Mac.

The average 30-year fixed mortgage rate reached 7.03% this week, up from 6.95% last week. It marked the fifth consecutive week of increases and the highest level during either of President Donald Trump’s terms.

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Higher borrowing costs are reducing homebuyers’ purchasing power. The report said rates have risen alongside Treasury yields, which reflect expectations for Federal Reserve policy, inflation and economic growth. The 10-year Treasury yield has climbed to about 5.15%, its highest level since 2007.

Housing activity is showing signs of strain. Pending home sales fell 4.7% from a year earlier in August, while mortgage applications for home purchases dropped 11% year over year.

Nearly 10% of borrowers are now choosing adjustable-rate mortgages, according to the Mortgage Bankers Association. Meanwhile, the median existing-home price reached $429,100 in August, extending its annual price growth streak to 38 months.

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