NEW YORK — The average rate on a 30-year fixed mortgage climbed above 7% Thursday for the first time since May 2025, as rising Treasury yields and surging oil prices pushed borrowing costs higher for prospective homebuyers.
The average 30-year fixed mortgage rate reached 7.07%, according to Mortgage News Daily, up 10 basis points from Wednesday.
The increase marks a sharp reversal from earlier this year. Mortgage rates had fallen as low as 5.99% in late February, the day before the start of the U.S. war with Iran.
Rates have generally moved higher since then as rising oil prices have fueled concerns about inflation and put upward pressure on bond yields.
Mortgage rates tend to loosely follow the yield on the 10-year U.S. Treasury note, which rose again Thursday.
“It’s been a rough couple of days for the bond market,” Matthew Graham, chief operating officer at Mortgage News Daily, said.
Graham pointed to the market’s reaction Wednesday to Treasury Secretary Scott Bessent and a Treasury buyback announcement, followed Thursday by an overnight surge in oil prices and what he characterized as a lackluster response to the latest Producer Price Index.
Inflation Report Fails to Ease Rates
The rise in bond yields came despite new wholesale inflation data showing prices increased 0.4% in August, matching economists’ consensus expectations.
The inflation reading was not enough to counter the impact of higher oil prices on the bond market.
The renewed rise in mortgage rates could further strain housing affordability at a time when many prospective buyers are already confronting elevated home prices.
For a buyer purchasing a $430,000 home — roughly the national median price — with a 20% down payment and a 30-year fixed-rate mortgage, the monthly principal-and-interest payment would be $244 higher at Thursday’s rate than it would have been at the end of February.
Nearly $3,000 Per Year
That translates into nearly $2,930 in additional principal-and-interest payments over a year, before accounting for property taxes, homeowners insurance or other housing expenses.
The move above 7% also represents a significant psychological threshold for a housing market that has struggled with affordability and sluggish sales.
Higher rates reduce how much home buyers can afford for a given monthly payment and can discourage existing homeowners with lower mortgage rates from selling and taking out a new loan at today’s higher rates.
