Buying a home in the United States is becoming increasingly challenging as US mortgage rates continue to climb, pushing monthly loan repayments higher and adding fresh pressure on an already sluggish housing market.
The average rate on a 30-year fixed mortgage, the most widely used home loan in the US, has now risen for the fifth consecutive week, reaching its highest level in more than a year. The latest increase is expected to make homeownership less affordable for many first-time buyers and families looking to upgrade.
Mortgage rates hit highest level in over a year
According to mortgage finance company Freddie Mac, the average 30-year fixed mortgage rate increased to 6.69% this week, up from 6.66% a week earlier.
The latest figure also exceeds the 6.63% recorded during the same period last year and represents the highest level since late July 2025.
Although the weekly increase appears modest, even small changes in mortgage rates can significantly raise borrowing costs over the life of a home loan.
What higher mortgage rates mean for homebuyers
For prospective buyers, rising mortgage rates translate into higher monthly EMIs, reducing the amount they can afford to borrow.
As financing becomes more expensive, many buyers either postpone purchasing a home or opt for lower-priced properties. This trend has been one of the key reasons behind the slower pace of home sales across the United States this year.
Higher borrowing costs also affect affordability, particularly for first-time buyers who are already coping with elevated home prices and limited housing inventory in many markets.
Refinancing becomes slightly cheaper
While long-term home loan rates moved higher, homeowners looking to refinance received a small measure of relief.
The average 15-year fixed mortgage rate, commonly used for refinancing existing home loans, edged down to 6.01%, compared with 6.04% a week ago.
However, the rate remains above the 5.75% level recorded a year earlier, meaning refinancing is still more expensive than it was in 2025.
What's driving mortgage rates higher?
Mortgage rates in the United States are influenced by several economic factors, including inflation, Federal Reserve monetary policy and movements in the bond market.
Lenders closely monitor the 10-year US Treasury yield, which serves as a benchmark for pricing long-term home loans.
The Treasury yield has remained elevated this year after geopolitical tensions and the conflict involving the United States and Iran fuelled concerns about inflation. Rising crude oil prices earlier in the year strengthened expectations that inflation could remain persistent, prompting investors to demand higher returns on long-term government bonds.
Although oil prices have eased in recent weeks, Treasury yields have not fully retreated.
As of Thursday, the 10-year Treasury yield stood at 4.65%, significantly higher than the 3.97% recorded before the conflict intensified in late February. The increase has continued to exert upward pressure on mortgage rates.
Housing market faces fresh headwinds
Economists say persistently high borrowing costs could keep the US housing market under pressure in the coming months.
With mortgage rates remaining well above the levels seen just a few years ago, affordability continues to be a major obstacle for prospective homeowners. Unless borrowing costs ease or home prices moderate, many buyers may choose to delay their purchase, extending the slowdown in housing activity.
For Americans hoping to enter the property market, the latest rise in mortgage rates serves as another reminder that financing a home remains considerably more expensive than it was a year ago.
