The average interest rate on the popular 30-year fixed mortgage exceeded 7% on Thursday for the first time since May 2025, reaching 7.07%, according to Mortgage News Daily. This is an increase of 10 basis points from Wednesday. A basis point is equal to 0.01%.
Mortgage rates roughly track the yield on the 10-year U.S. Treasury bond. It rose again on Thursday as oil prices soared. This overshadowed the overall inflation data, which showed a 0.4% rise in prices in August, which was in line with the Dow Jones consensus forecast.
“The past few days have been tough for the bond market,” said Matthew Graham, chief operating officer of Mortgage News Daily. “Yesterday was a reaction to[Treasury Secretary]Bessent and the Treasury’s buyback announcement. Today, oil prices skyrocketed overnight and there was a muted response to the producer price index (PPI),” he said.
Mortgage rates have been rising since the Iran war began. The day before the war began, interest rates hit a record low of 5.99%. For comparison, a buyer who purchased a $430,000 home (around the national median) with a 30-year fixed loan with a 20% down payment would now pay $244 more per month in principal and interest than at the end of February.
Shares of U.S. homebuilders had already fallen on Thursday after a monthly report on existing home sales showed sales were falling and home prices were rising even as supply increased.
