US Mortgage Rates Near 7% as Housing Recovery Hopes Fade

U.S. 30-year fixed mortgage rates are nearing 7% for the first time since January 2025. According to Sina Finance, the rise has been driven mainly by the Iran war pushing up Treasury yields, adding pressure to a U.S. housing market already in its fourth year of stagnation. Freddie Mac data showed the average 30-year fixed mortgage rate was 6.76% last week, but daily rates have since jumped above 7%. Michael Fratantoni, chief economist at the Mortgage Bankers Association, said the sharp move would prompt potential buyers to pause and could keep them from signing contracts or applying for loans. Mortgage rates typically track the 10-year U.S. Treasury yield, which briefly topped 5% on September 14 for the first time since late 2023. The Federal Reserve is expected to raise rates on September 16 for the first time in three years. The National Association of Realtors said existing-home sales fell 2% in August from the previous month to an annualized pace of 3.98 million, the lowest since June last year. Zillow economist Kara Ng said calculations for the rest of this year will be very challenging, after the firm cut its 2026 home-sales growth forecast to 1.3% from 4.3% and now expects a 3.5% decline in the fourth quarter. Higher mortgage rates are also weighing on new-home construction, as builders offer larger rate buydowns to support sales and face thinner margins.