According to the Mortgage Bankers Association, the 30-year fixed mortgage rate reached 7.12% for the week ending September 18. This represents a 15 basis point increase from the previous week and marks the highest level recorded since May 2024.
Data from Freddie Mac shows a similar trend, with the 30-year fixed average at 6.95% as of September 17, up from 6.76% the week prior. This is the highest reading for the survey since January 2025. The discrepancy between the two reports is attributed to different methodologies regarding fees and points.
The rise in borrowing costs is driven by Federal Reserve policy and geopolitical instability in energy markets. The Fed maintains its policy rate in the 3.75%-4.00% range to combat inflation. Meanwhile, military strikes in the Middle East have increased crude prices, pushing Treasury yields higher.
The housing market is facing a decline in purchase applications and refinancing activity. Borrowers are increasingly opting for adjustable-rate mortgages to secure lower initial payments. However, the market remains constrained by the lock-in effect, as homeowners with low-interest loans are reluctant to sell.
