Average Rate on a US 30-year Mortgage Rises to 6.81%

Introduction to the Current Mortgage Rate Trend

The average rate on a 30-year mortgage in the U.S. edged above 6.8% this week, returning to where it was just three weeks ago.

By ALEX VEIGA, AP Business Writer
The rate increased to 6.81% from 6.76% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.02%.

Factors Influencing Mortgage Rates

Mortgage rates are influenced by several factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations about the economy and inflation. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose. The average rate ticked up to 5.92% from 5.89% last week. It’s down from 6.28% a year ago, Freddie Mac said.

Recent Trends in Mortgage Rates

The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, which it set in mid-January. The average rate’s low point so far was five weeks ago, when it briefly dropped to 6.62%. The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have discouraged home shoppers, leading to a lackluster start to the spring homebuying season, even as the inventory of homes on the market is up sharply from last year.

Impact on Home Sales

Sales of previously occupied U.S. homes fell in March, posting the largest monthly drop since November 2022. The recent swings in mortgage rates reflect volatility in the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield, which had mostly fallen this after climbing to around 4.8% in mid-January, surged last month to 4.5% amid a sell-off of government bonds, triggered by investor anxiety over the Trump administration’s trade war.

Expectations for Mortgage Rates

The yield eased in the weeks since, but climbed above 4.5% earlier this week after the U.S. and China agreed to a 90-day truce in their trade dispute. That raised expectations that the Federal Reserve won’t have to cut interest rates as deeply as expected this year in order to shield the economy from the damage of tariffs. The 10-year Treasury yield was at 4.45% in midday trading Thursday. Economists expect mortgage rates to remain volatile in coming months, though they generally call for the average rate on a 30-year mortgage to remain above 6.5% this year.

Original Publication

Originally Published: May 15, 2025 at 12:08 PM EDT

Conclusion

In conclusion, the recent increase in the average rate on a 30-year mortgage to 6.81% reflects the ongoing volatility in the mortgage market, influenced by various economic factors including trade disputes and Federal Reserve policies. As the spring homebuying season progresses, potential homebuyers will be closely watching these rates, which could impact their purchasing decisions.

FAQs

• Q: What is the current average rate on a 30-year mortgage in the U.S.?
  A: The current average rate on a 30-year mortgage is 6.81%.
• Q: How have mortgage rates been trending recently?
  A: Mortgage rates have been volatile, influenced by factors such as global demand for U.S. Treasurys and the Federal Reserve’s interest rate policy decisions.
• Q: What impact are elevated mortgage rates having on the housing market?
  A: Elevated mortgage rates are discouraging home shoppers, contributing to a lackluster start to the spring homebuying season despite an increase in the inventory of homes on the market.
• Q: What do economists expect for mortgage rates in the coming months?
  A: Economists expect mortgage rates to remain volatile but generally above 6.5% for the year.