Freddie Mac: 30-Year Mortgage Rate Tops 7% for the First Time Since January 2025

The benchmark U.S. mortgage rate crossed a grim threshold this week. The average 30-year fixed-rate mortgage climbed to 7.03% as of Sept. 24, up from 6.95% a week earlier, according to Freddie Mac's Primary Mortgage Market Survey — the first time the survey's average has topped 7% since January 16, 2025, when it stood at 7.04%. A year ago, it averaged 6.30%.

It was the fifth straight weekly increase. The 15-year fixed rate rose to 6.42% from 6.26%. Freddie Mac chief economist Sam Khater said the housing market 'remains supported by a solid labor market and an economy that is growing at a healthy rate,' but the cost pressure on buyers is unambiguous: bond markets have done most of the work, with the 10-year Treasury yield around 5%, its highest since July 2007.

The jump follows the Federal Reserve's Sept. 16 decision to raise its benchmark rate to 3.75%–4% — the central bank's first hike since July 2023 — with most policymakers expecting at least one more increase before year-end. Rising energy prices tied to the war between the U.S. and Iran have added to inflation pressure, pushing oil higher and lifting the inflation expectations that feed into mortgage pricing.

' Beyond the immediate financial constraints, the 7% threshold is a foreboding psychological barrier,' said Bright MLS chief economist Lisa Sturtevant. 'Crossing this mark could create a chilling effect on the market, leading to home sales transactions to slow considerably this fall.' CNN's coverage noted the stark difference for buyers: someone who locked a rate in February, when the average briefly dipped to 5.98%, will pay hundreds of thousands of dollars less in interest over a 30-year loan than someone buying today at 7%.

For South Bay buyers, the math is especially harsh because the medians are high: on a $1 million loan, every quarter-point of rate is roughly $170 a month. NAR chief economist Lawrence Yun put it bluntly in a blog post: 'Expect 7% as the new normal.' The practical move hasn't changed — get pre-approved at real rates, shop multiple lenders, and negotiate price and terms against motivated sellers — but nobody should plan their purchase around a rate dip that's showing no sign of coming.

Source: Mortgage Professional America — https://www.mpamag.com/us/mortgage-industry/market-updates/mortgage-rates-top-7-for-first-time-since-january-2025/591091

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