Introduction to Mortgage Rates
The average rate on a 30-year U.S. mortgage has ticked up for the second straight week, following a string of declines that had brought down home borrowing costs to their lowest level in nearly a year. This change in mortgage rates is influenced by several factors, including the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation.
Factors Influencing Mortgage Rates
Mortgage rates generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The 10-year yield was at 4.10% at midday Thursday, down from 4.19% the same time last week. Much of that decline has come in the past few days, driven by discouraging reports on the U.S. economy, particularly the job market.
By MATT OTT, AP Business Writer
Current Mortgage Rate
The average long-term mortgage rate rose this week to 6.34% from 6.3% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.12%. This increase in mortgage rates may affect the housing market, which has been in a slump since 2022, when mortgage rates began climbing from historic lows.
Housing Market Trends
Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. So far this year, sales are running below where they were at this time in 2024. The second straight bump in rates could signal a repeat of what happened last year after the Fed cut its benchmark rate for the first time in more than four years. Back then, mortgage rates fell for several weeks prior to the Fed’s September rate cut. In the following weeks, however, mortgage rates began rising again, eventually reaching just above 7% in mid-January this year.
Impact on Homeowners
The late-summer decline in mortgage rates has already encouraged many homeowners who bought in recent years after rates climbed well above 6% to refinance to a lower rate. However, mortgage rates will have to sink below 6% to make refinancing an attractive option to a broader swath of homeowners. That’s because about 81% of U.S. homes have a mortgage with a rate of 6% or lower, according to Realtor.com.
Forecast and Trends
Economists generally forecast the average rate on a 30-year mortgage to remain near the mid-6% range this year. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also inched up this week. The average rate rose to 5.55% from 5.49% the previous week. A year ago, it was 5.25%, Freddie Mac said.
Conclusion
In conclusion, the average long-term US mortgage rate has ticked up for the second straight week, following a string of declines. This change in mortgage rates is influenced by several factors, including the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation. The impact of this increase in mortgage rates on the housing market and homeowners will be closely watched in the coming weeks and months.
FAQs
Originally Published: October 2, 2025 at 12:11 PM EDT
Q: What is the current average rate on a 30-year U.S. mortgage?
A: The average long-term mortgage rate rose this week to 6.34% from 6.3% last week.
Q: What factors influence mortgage rates?
A: Mortgage rates are influenced by several factors, including the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations for the economy and inflation.
Q: How will the increase in mortgage rates affect the housing market?
A: The increase in mortgage rates may affect the housing market, which has been in a slump since 2022, when mortgage rates began climbing from historic lows.
Q: What is the forecast for mortgage rates for the rest of the year?
A: Economists generally forecast the average rate on a 30-year mortgage to remain near the mid-6% range this year.
