Mortgage rates rise again as spring homebuying nears peak
The average rate on a 30-year fixed mortgage climbed to 6.38%, the highest level in more than six months, according to Freddie Mac, raising borrowing costs for prospective homebuyers as the spring season approaches its busiest stretch. The increase followed a week in which the benchmark rate rose to 6.38% from 6.22% in the prior week, mortgage data provider Freddie Mac said.
Freddie Mac also reported that borrowing costs for shorter-term loans rose. The average rate on 15-year fixed mortgages increased to 5.75% from 5.54% last week, with Freddie Mac adding that the year-ago comparison for that product was 5.89%.
Realtor.com said the move marked a sharp acceleration in the pace of rate increases, with the 30-year fixed rate posting its largest one-week jump since April 2025 and its largest three-week increase since October 2024. The last time the average 30-year fixed rate was higher, Realtor.com said, was Sept. 4, when it was 6.5%.
Higher mortgage rates can increase the total monthly cost of buying a home, potentially limiting what buyers can afford during a period when demand typically rises. The increase comes after rates had fallen to just under 6% about four weeks earlier, before trending upward again.
The rate spike has been linked to expectations for inflation after higher oil prices tied to the Iran war fed energy-price concerns, according to the AP reporting. Mortgage rates generally move with the trajectory of the 10-year Treasury yield, which lenders use as a guide for pricing home loans, and the AP said the 10-year Treasury yield was 4.39% at midday Thursday, up from about 4.26% a week earlier.
Investors also appeared to be adjusting expectations around when the Federal Reserve might cut interest rates, the AP reported. At its meeting last week, the Fed held off on cutting rates, with Chair Jerome Powell highlighting an increasingly uncertain outlook for the U.S. economy and inflation in the wake of the Iran war, AP reported, suggesting the Fed could keep rates unchanged for an extended period.
While the central bank does not set mortgage rates directly, the Fed’s policy decisions influence expectations for short-term interest rates that, in turn, can affect yields on longer-term Treasurys. As long-term bond yields rise, that pushes mortgage rates higher, AP said.
The housing market has been in a slump since 2022, when mortgage rates began climbing from pandemic-era lows, the AP reported. The AP said sales of previously occupied homes were essentially flat last year and at a 30-year low, and that sales have remained sluggish this year, declining in January and February compared with a year earlier.
Still, the AP said the average 30-year mortgage rate remains below the year-ago level, a situation that can help buyers who can qualify for mortgages at the current rates. It also pointed to buyer-friendly conditions in some markets, including slower or falling home-price growth and more homes for sale than a year earlier.
Even so, Realtor.com’s senior economist Joel Berner said in an email that rising mortgage rates were a “major barrier” to what he described as a very favorable spring homebuying season. AP also reported that mortgage shoppers are already showing signs of hesitation as rates rise.
The AP said mortgage applications declined 10.5% last week from the prior week, citing the Mortgage Bankers Association. The MBA said applications for both purchase and refinancing loans fell, and CEO Bob Broeksmit said in a statement that higher borrowing costs, affordability pressures and economic uncertainty were likely prompting some prospective buyers to delay purchase decisions.