US mortgage rates rose above 7 percent for the first time since January 2025, according to Freddie Mac, pushing borrowing expenses higher across the residential property market.
Federal Reserve policy shift
The climb follows action on 16 September by the US Federal Reserve, which raised interest rates by 0.25 percentage points to a target band of 3.75 percent to 4 percent. The adjustment represented the central bank’s first rate increase since 2023. Most policymakers on the rate-setting committee projected at least one more hike before the year concludes.
Longer-term government bond yields also climbed sharply alongside monetary tightening. The 10-year US Treasury yield touched its highest level since July 2007, while the 30-year yield reached heights unseen since 2004. Higher benchmark yields routinely lift home-loan financing costs. Financing costs remain below late 2023, when Freddie Mac recorded a 30-year rate peak of 7.79 percent.
Treasury actions and market pressure
To address strains in sovereign borrowing, US Treasury Secretary Scott Bessent had previously unveiled plans to triple government debt repurchases, seeking to bolster liquidity across federal debt issues while tensions between Israel and Iran lingered in the background. Brent crude oil traded above $105 per barrel earlier on Thursday.
Anthony Smith, senior economist at Realtor.com, noted that crossing the 7 percent mark carries psychological weight alongside numerical hurdles for purchasers. Political pressure has broadened as well. Nearly three-quarters of Americans disapprove of Donald Trump’s management of the economy, according to survey results released by CNN and SSRS, as Republicans and Congress assess domestic fallout.
Source: Freddie Mac
